SEC Info - Bear Stearns Second Lien Trust 2007-1 - ‘8-K’ for 4/30/07

Attention: Mr. Frank Ruhl
Telecopier No.: (215) 682-3396
(ii) if to the Owner:
Mac Arthur Ridge II,
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038
Attention: Mr. Edward Raice
Telecopier No.: (972) 444-2810
or such other address as may hereafter be furnished to the other party by like notice. Any such demand, notice, or communication hereunder shall be deemed to have been received on the date delivered to or received at the premises of the address (as evidenced, in the case of registered or certified mail, by the date noted on the return receipt).
Section 11.06 Severability of Provisions.
Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof. If the invalidity of any part, provision, representation or warranty of this Agreement shall deprive any party of the economic benefit intended to be conferred by this Agreement, the parties shall negotiate, in good faith, to develop a structure the economic effect of which is nearly as possible the same as the economic effect of this Agreement without regard to such invalidity.
Section 11.07 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.
Section 11.08 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(i) the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(ii) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;
(iii) references herein to "Articles," "Sections," "Subsections," "Paragraphs," and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(iv) a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(v) the words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(vi) the term "include" or "including" shall mean without limitation by reason of enumeration.
Section 11.09 Reproduction of Documents.
This Agreement and all documents relating hereto, including, without limitation, (i) consents, waivers and modifications which may hereafter be executed, (ii) documents received by any party at the closing, and (iii) financial statements, certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.
Section 11.10 Confidentiality of Information.
Section 11.11 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of Mortgage is subject to recordation in all appropriate public offices for real property records in all the counties or other comparable jurisdictions in which any or all of the Mortgaged Properties are situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the Servicer at the Owner's expense.
Section 11.12 Assignment by the Owner.
The Owner shall have the right, without the consent of the Servicer hereof, to assign, in whole or in part, its interest under this Agreement with respect to some or all of the Mortgage Loans, and designate any person to exercise any rights of the Owner hereunder, by executing an assignment and assumption agreement reasonably acceptable to the Servicer and the assignee or designee shall accede to the rights and obligations hereunder of the Owner with respect to such Mortgage Loans. In no event shall Owner sell a partial interest in any Mortgage Loan. All references to the Owner in this Agreement shall be deemed to include its assignees or designees. It is understood and agreed between the Owners and the Servicer that no more than five (5) Persons shall have the right of owner under this Agreement at any one time.
Section 11.13 No Partnership.
Nothing herein contained shall be deemed or construed to create a co-partnership or joint venture between the parties hereto and the services of the Servicer shall be rendered as an independent contractor and not as agent for Owner.
Section 11.14 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same agreement. Subject to Section 8.04, this Agreement shall inure to the benefit of and be binding upon the Servicer and the Owner and their respective successors and assigns.
Section 11.15 Entire Agreement.
Each of the Servicer and the Owner acknowledge that no representations, agreements or promises were made to it by the other party or any of its employees other than those representations, agreements or promises specifically contained herein. This Agreement sets forth the entire understanding between the parties hereto and shall be binding upon all successors of both parties.
IN WITNESS WHEREOF, the Servicer and the Owner have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date and year first above written.
GMAC MORTGAGE CORPORATION Servicer
By:
Name:
Title:
EMC MORTGAGE CORPORATION Owner
By:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
(date)
To:______________________
_________________________
(the "Depository")
As "Servicer" under the Servicing Agreement, dated as of , (the "Agreement"), we hereby authorize and request you to establish an account, as a Custodial Account pursuant to Section 4.04 of the Agreement, to be designated as "[Servicer] Custodial Account, in trust for [Owner], Owner of Whole Loan Mortgages, and various Mortgagors." All deposits in the account shall be subject to withdrawal therefrom by order signed by the Servicer. You may refuse any deposit which would result in violation of the requirement that the account be fully insured as described below. This letter is submitted to you in duplicate. Please execute and return one original to us.
By:____________________
Name:__________________
Title:_________________
The undersigned, as "Depository", hereby certifies that the above described account has been established under Account Number __________, at the office of the depository indicated above, and agrees to honor withdrawals on such account as provided above. The full amount deposited at any time in the account will be insured up to applicable limits by the Federal Deposit Insurance Corporation through the Bank Insurance Fund or the Savings Association Insurance Fund or will be invested in Permitted Investments as defined in the Agreement.
[ ]
(name of Depository)
By:____________________
Name:__________________
Title:_________________
EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
(date)
To:___________________________
______________________________
(the "Depository")
As "Servicer" under the Servicing Agreement, dated as of (the "Agreement"), we hereby authorize and request you to establish an account, as an Escrow Account pursuant to Section 4.06 of the Agreement, to be designated as "[Servicer] Escrow Account, in trust for [Owner], Owner of Whole Loan Mortgages, and various Mortgagors." All deposits in the account shall be subject to withdrawal therefrom by order signed by the Servicer. You may refuse any deposit which would result in violation of the requirement that the account be fully insured as described below. This letter is submitted to you in duplicate. Please execute and return one original to us.
By:____________________
Name:__________________
Title:_________________
[ ]
(name of Depository)
By:____________________
Name:__________________
Title:_________________
EXHIBIT D
REQUEST FOR RELEASE
EXHIBIT E
LOAN LEVEL SCHEDULED-SCHEDULED
REMITTANCE TAPE LAYOUT
Amendment No. 1 to the Servicing Agreement
This is Amendment No. 1 dated October 1, 2001 to that certain Servicing Agreement (the “Agreement”) dated as of May 1, 2001 between EMC MORTGAGE CORPORATION, as Owner and GMAC MORTGAGE CORPORATION, as Servicer.
W I T N E S S E T H :
WHEREAS, the Owner is the owner of the Mortgage Loans and the Servicer is the servicer of the Mortgage Loans; and
WHEREAS, the Owner and the Servicer wish to amend the Agreement;
(a) The following shall replace (i)(a), (b) and (c) in the first paragraph of Section 5.01:
“(i) all amounts credited to the Custodial Account as of the close of business on the related preceding Determination Date, except Principal Prepayments received on or after the first day of the month in which the Remittance Date occurs shall be remitted to the Owner on the next following Remittance Date,”
(b) Capitalized terms used herein and not defined shall have the meanings set forth in the Agreement.
(c) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS. THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
(d) Except as such amendments are made herein, the Agreement shall remain in full force and effect.
[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the Owner and the Servicer have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.
EMC MORTGAGE CORPORATION
Owner
By:________________________
Name:
Title:
GMAC MORTGAGE CORPORATION
Servicer
By: _______________________
Name:
Title:
Amendment No. 2 to the Servicing Agreement
This is Amendment No. 1 dated July 31, 2002 to that certain Servicing Agreement (the “Agreement”) dated as of May 1, 2001 between EMC MORTGAGE CORPORATION, as Owner and GMAC MORTGAGE CORPORATION, as Servicer.
W I T N E S S E T H :
WHEREAS, the Owner is the owner of the Mortgage Loans and the Servicer is the servicer of the Mortgage Loans; and
WHEREAS, the Owner and the Servicer wish to amend the Agreement;
(a)	The definition of “Permitted Investments” in Section 1.01 of the Agreement is amended by deleting (viii) in such definition.
(b) Capitalized terms used herein and not defined shall have the meanings set forth in the Agreement.
(d) Except as such amendments are made herein, the Agreement shall remain in full force and effect.
[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the Owner and the Servicer have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.
EMC MORTGAGE CORPORATION
Owner
By:________________________
Name:
Title:
GMAC MORTGAGE CORPORATION
Servicer
By: _______________________
Name:
Title:
AMENDMENT NUMBER THREE
to the
SERVICING AGREEMENT
Dated as of December 20, 2005
between
EMC MORTGAGE CORPORATION,
as Owner
and
GMAC MORTGAGE CORPORATION,
as Servicer
This AMENDMENT NUMBER THREE (this “Amendment”) is made and entered into this 20^th day of December, 2005, by and between EMC Mortgage Corporation, a Delaware corporation, as owner (the “Owner”) and GMAC Mortgage Corporation, as servicer (the “Servicer”) in connection with the Servicing Agreement, dated as of May 1, 2001, between the above mentioned parties (the “Agreement”). This Amendment is made pursuant to Section 11.02 of the Agreement.
RECITALS
WHEREAS, the parties hereto have entered into the Agreement;
WHEREAS, the Agreement provides that the parties thereto may enter into an amendment to the Agreement;
WHEREAS, the parties hereto desire to amend the Agreement as set forth in this Amendment; and
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Agreement.
2. Article I of the Agreement is hereby amended effective as of the date hereof by adding the following definitions to Section 1.01:
Commission or SEC: The Securities and Exchange Commission.
Depositor: The depositor, as such term is defined in Regulation AB, with respect to any Securitization Transaction.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Master Servicer: With respect to any Securitization Transaction, the “master servicer,” if any, identified in the related transaction document.
Pass-Through Transfer: Any transaction involving either (1) a sale or other transfer of some or all of the Mortgage Loans directly or indirectly to an issuing entity in connection with an issuance of publicly offered or privately placed, rated or unrated mortgage-backed securities or (2) an issuance of publicly offered or privately placed, rated or unrated securities, the payments on which are determined primarily by reference to one or more portfolios of residential mortgage loans consisting, in whole or in part, of some or all of the Mortgage Loans.
Qualified Correspondent: Any Person from which the Servicer purchased Mortgage Loans, provided that the following conditions are satisfied: (i) such Mortgage Loans were originated pursuant to an agreement between the Servicer and such Person that contemplated that such Person would underwrite mortgage loans from time to time, for sale to the Servicer, in accordance with underwriting guidelines designated by the Servicer (“Designated Guidelines”) or guidelines that do not vary materially from such Designated Guidelines; (ii) such Mortgage Loans were in fact underwritten as described in clause (i) above and were acquired by the Servicer within 180 days after origination; (iii) either (x) the Designated Guidelines were, at the time such Mortgage Loans were originated, used by the Servicer in origination of mortgage loans of the same type as the Mortgage Loans for the Servicer’s own account or (y) the Designated Guidelines were, at the time such Mortgage Loans were underwritten, designated by the Servicer on a consistent basis for use by lenders in originating mortgage loans to be purchased by the Servicer; and (iv) the Servicer employed, at the time such Mortgage Loans were acquired by the Servicer, pre-purchase or post-purchase quality assurance procedures (which may involve, among other things, review of a sample of mortgage loans purchased during a particular time period or through particular channels) designed to ensure that Persons from which it purchased mortgage loans properly applied the underwriting criteria designated by the Servicer.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a sale or other transfer of some or all of the Mortgage Loans directly or indirectly to an issuing entity in connection with an issuance of publicly offered or privately placed, rated or unrated mortgage-backed securities or (2) an issuance of publicly offered or privately placed, rated or unrated securities, the payments on which are determined primarily by reference to one or more portfolios of residential mortgage loans consisting, in whole or in part, of some or all of the Mortgage Loans.
Servicing Criteria: As of any date of determination, the “servicing criteria” set forth in Item 1122(d) of Regulation AB, or any amendments thereto, a summary of the requirements of which as of the date hereof is attached hereto as Exhibit G for convenience of reference only. In the event of a conflict or inconsistency between the terms of Exhibit G and the text of Item 1122(d) of Regulation AB, the text of Item 1122(d) of Regulation AB shall control (or those Servicing Criteria otherwise mutually agreed to by the Owner, Servicer and any Person that will be responsible for signing any Sarbanes Certification with respect to a Securitization Transaction in response to evolving interpretations of Regulation AB and incorporated into a revised Exhibit G).
Static Pool Information: Static pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not responsible for the overall servicing (as “servicing” is commonly understood by participants in the mortgage-backed securities market) of Mortgage Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans under the direction or authority of the Servicer or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the Servicer or any Subservicer and is responsible for the performance (whether directly or through Subservicers or Subcontractors) of a substantial portion of the material servicing functions required to be performed by the Servicer under this Agreement or any Reconstitution Agreement that are identified in Item 1122(d) of Regulation AB.
Third-Party Originator: Each Person, other than a Qualified Correspondent, that originated Mortgage Loans acquired by the Servicer.
3. Article III of the Agreement is hereby amended effective as of the date hereof by adding the following new clause (m):
(m) As of the date of each Pass-Through Transfer, and except as has been otherwise disclosed to the Owner, any Master Servicer and any Depositor: (1) the Servicer is not aware and has not received notice that any default or servicing related performance trigger has occurred as to any other securitization due to any act or failure to act of the Servicer; (2) no material noncompliance with applicable servicing criteria as to any other securitization involving residential mortgage loans involving the Servicer as servicer has been disclosed or reported by the Servicer; (3) the Servicer has not been terminated as servicer in a residential mortgage loan securitization, either due to a servicing default or to application of a servicing performance test or trigger; (4) no material changes to the Servicer’s servicing policies and procedures with respect to the servicing function it will perform under this Agreement or any Reconstitution Agreement has occurred in the preceding three years; (5) there are no aspects of the Servicer’s financial condition that could have a material adverse impact on the performance by the Servicer of its servicing obligations hereunder; (6) there are no legal proceedings pending, or known to be contemplated by governmental authorities, against the Servicer that could be material to investors in the securities issued in such Pass-Through Transfer; and (7) there are no affiliations, relationships or transactions relating to the Servicer of a type that are described under Item 1119 of Regulation AB.
4. Article IV of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 4.14:
Section 4.14 Financial Statements.
Upon request by the Purchaser, the Servicer shall provide its financial statements of its parent for the previous two fiscal years.
5. The Agreement is hereby amended effective as of the date hereof by moving clauses (a) through (m) of Article III to Section 3.01.
6. The Agreement is hereby amended effective as of the date hereof by adding the following new Section 3.02:
Section 3.02 Updates.
(a) If so requested by the Owner or any Depositor on any date, the Servicer shall, within five Business Days, and in no event later than seven Business Days following such request, confirm in writing the accuracy of the representations and warranties set forth in clause (m) of this Article III or, if any such representation and warranty is not accurate as of the date of such request, provide reasonably adequate disclosure of the pertinent facts, in writing, to the requesting party.
(b) If so requested by the Owner or any Depositor for the purpose of satisfying its reporting obligation under the Exchange Act with respect to any class of asset-backed securities, the Servicer shall (or shall cause each Subservicer to) (i) notify the Owner, any Master Servicer and any Depositor in writing of (A) any material litigation or governmental proceedings pending against the Servicer or any Subservicer, (B) any affiliations or relationships that develop following the closing date of a Pass-Through Transfer between the Servicer or any Subservicer and any of the parties specified in clause (7) of paragraph (m) of Section 3.01 (and any other parties identified in writing by the requesting party) with respect to such Pass-Through Transfer, (C) any Event of Default under the terms of this Agreement or any Reconstitution Agreement, (D) any merger, consolidation or sale of substantially all of the assets of the Servicer, and (E) the Servicer’s entry into an agreement with a Subservicer to perform or assist in the performance of any of the Servicer’s obligations under this Agreement or any Reconstitution Agreement and (ii) provide to the Owner and any Depositor a description of such proceedings, affiliations or relationships.
All notification pursuant to this Section 3.02(b), other than those pursuant to Section 3.02(b)(i)(A), should be sent to:
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751
With a copy to:
Bear, Stearns & Co. Inc.
383 Madison Avenue, 3rd Floor
New, York, NY 10179
Attention: Global Credit Administration
Facsimile: (212) 272-6564
Notifications pursuant to Section 3.01(b)(i)(A) should be sent to:
EMC Mortgage Corporation
Two Mac Arthur Ridge
909 Hidden Ridge Drive, Suite 200
Irving, TX 75038
Attention: Associate General Counsel for Loan Administration
Facsimile: (972) 831-2555
With copies to:
Bear, Stearns & Co. Inc.
383 Madison Avenue, 3rd Floor
New, York, NY 10179
Attention: Global Credit Administration
Facsimile: (212) 272-6564
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751
(c) As a condition to the succession to the Servicer or any Subservicer as servicer or subservicer under this Agreement or any Reconstitution Agreement by any Person (i) into which the Servicer or such Subservicer may be merged or consolidated, or (ii) which may be appointed as a successor to the Servicer or any Subservicer, the Servicer shall provide to the Owner, any Master Servicer and any Depositor, at least fifteen (15) calendar days prior to the effective date of such succession or appointment, (x) written notice to the Owner, any Master Servicer and any Depositor of such succession or appointment and (y) in writing and in form and substance reasonably satisfactory to the Owner, any Master Servicer and such Depositor, all information reasonably requested by the Owner, any Master Servicer or any Depositor in order to comply with its reporting obligation under Item 6.02 of Form 8-K with respect to any class of asset-backed securities.
7. Article IV of the Agreement is hereby amended effective as of the date hereof by adding the following after the first sentence of Section 4.01:
In addition, the Servicer shall furnish information regarding the borrower credit files related to such Mortgage Loan to credit reporting agencies in compliance with the provisions of the Fair Credit Reporting Act and the applicable implementing regulations.
8. Article IV of the Agreement is hereby amended effective as of the date hereof by revising the first paragraph of Section 4.03 by adding the following after the first sentence:
In determining the delinquency status of any Mortgage Loan, the Servicer will use delinquency recognition policies as utilized by the Servicer in connection with the servicing of mortgage loans on its own securitizations.
9. Article V of the Agreement is hereby amended effective as of the date hereof by deleting Section 5.02 in its entirety and replacing it with the following:
Section 5.02 Statements to the Owner.
(i) with respect to each Mortgage Loan and each Monthly Payment, the amount of such remittance allocable to principal (including a separate breakdown of any Principal Prepayment, including the date of such prepayment, and any prepayment penalties or premiums, along with a detailed report of interest on principal prepayment amounts remitted in accordance with Section 4.04);
(ii) with respect to each Mortgage Loan and each Monthly Payment, the amount of such remittance allocable to interest;
(iii) with respect to each Mortgage Loan, the amount of servicing compensation received by the Servicer during the prior distribution period;
(iv) the Stated Principal Balance of each Mortgage Loan and the aggregate Stated Principal Balance of all Mortgage Loans as of the first day of the distribution period and the last day of the distribution period;
(v) with respect to each Mortgage Loan, the current Mortgage Interest Rate;
(vi) with respect to each Mortgage Loan, the aggregate amount of any Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and REO Disposition Proceeds received during the prior distribution period;
(vii) with respect to each Mortgage Loan, the amount of any Prepayment Interest Shortfalls paid by the Servicer in accordance with Section 4.04(viii) during the prior distribution period;
(viii) with respect to each Mortgage Loan, the Stated Principal Balance of each Mortgage Loan (a) delinquent as grouped in the following intervals through final liquidation of such Mortgage Loan: 30 to 59 days, 60 to 89 days, 90 days or more; (b) as to which foreclosure has commenced; and (c) as to which REO Property has been acquired;
(ix) with respect to each Mortgage Loan, and in the aggregate for all Mortgage Loans, the amount of any Monthly Advances made by the Servicer during the prior distribution period;
(x) with respect to each Mortgage Loan, the amount of any Servicing Advances made by the Servicer with respect to such Mortgage Loan, and the aggregate amount of Servicing Advances for all Mortgage Loans during the prior distribution period;
(xi) with respect to each Mortgage Loan, a description of any Nonrecoverable Advances made by the Servicer with respect to such Mortgage Loan including the amount, terms and general purpose of such Nonrecoverable Advances, and the aggregate amount of Nonrecoverable Advances for all Mortgage Loans during the prior distribution period;
(xii) with respect to any Mortgage Loan, a description of any material modifications, extensions or waivers to the terms, fees, penalties or payments of such Mortgage Loan during the prior distribution period or that have cumulatively become material over time;
(xiii) with respect to each Mortgage Loan, the Stated Principal Balance of any substitute Mortgage Loan provided by the Servicer and the Stated Principal Balance of any Mortgage Loan that has been replaced by a substitute Mortgage Loan in accordance with Section 3.03 herein;
(xiv) with respect to each Mortgage Loan, the Stated Principal Balance of any Mortgage Loan that has been repurchased by the Servicer in accordance with Section 3.03 herein.
For any Mortgage Loan in a Pass-Through Transfer, the Servicer shall also furnish the following items in the Report to the Master Servicer, provided that if these items are included in the report to the Owner they need not be incorporated in the Report:
(i) the beginning and ending balances of the Custodial Account and Escrow Account;
(ii) with respect to each Mortgage Loan, a description of any Monthly Advances, Servicing Advances and Nonrecoverable Advances reimbursed to the Servicer with respect to such Mortgage Loan during the prior distribution period pursuant to Section 4.05, and the source of funds for such reimbursement, and the aggregate amount of any Monthly Advances, Servicing Advances and Nonrecoverable Advances reimbursed to the Servicer for all Mortgage Loans during the prior distribution period pursuant to Section 4.05; and
(iii) a description of any material breach of a representation or warranty set forth in Section 3.01 or Section 3.02 herein or of any other breach of a covenant or condition contained herein and the status of any resolution of such breach.
In addition, the Servicer shall provide to the Owner such other information known or available to the Servicer that is necessary in order to provide the distribution and pool performance information as required under Item 1121 of Regulation AB, as amended from time to time, as determined by the Owner in its reasonable discretion. Notwithstanding the foregoing, the Servicer shall be under no obligation to provide information that the Owner deems required under Regulation AB if (i) the Servicer does not reasonably believe that such information is required under Regulation AB and (ii) the Servicer is not providing such information for (A) its own securitizations, or (B) any third party securitizations with mortgage loans serviced by the Servicer[, unless the Owner pays all reasonable actual costs incurred by the Servicer in connection with the preparation and delivery of such information and the Servicer is given reasonable time to establish the necessary systems and procedures to produce such information; provided, however, that the costs incurred by the Servicer in connection with establishing the necessary systems and procedures will be split pro rata with any other purchaser that makes a request for similar information.
The Servicer shall also provide a monthly report, in the form of Exhibit E hereto, or such other form as is mutually acceptable to the Servicer, the Owner and any Master Servicer, Exhibit H or such other agreeable format with respect to defaulted mortgage loans and Exhibit I, with respect to realized losses and gains, with each such report.
The Servicer shall prepare and file any and all information statements or other filings required to be delivered to any governmental taxing authority or to Owner pursuant to any applicable law with respect to the Mortgage Loans and the transactions contemplated hereby. In addition, the Servicer shall provide Owner with such information concerning the Mortgage Loans as is necessary for Owner to prepare its federal income tax return as Owner may reasonably request from time to time.
In addition, not more than sixty (60) days after the end of each calendar year, the Servicer shall furnish to each Person who was an Owner at any time during such calendar year an annual statement in accordance with the requirements of applicable federal income tax law as to the aggregate of remittances for the applicable portion of such year.
10. Article VI of the Agreement is hereby amended effective as of the date hereof by deleting Section 6.04 in its entirety and replacing it with the following:
Section 6.04 Annual Statement as to Compliance; Annual Certification.
(a) The Servicer will deliver to the Owner and any Master Servicer, using its best efforts to deliver on March 1, but in no event later than March 15, of each calendar year beginning in 2007, an Officers’ Certificate acceptable to the Owner (an “Annual Statement of Compliance”) stating, as to each signatory thereof, that (i) a review of the activities of the Servicer during the preceding calendar year and of performance under this Agreement or other applicable servicing agreement has been made under such officers’ supervision and (ii) to the best of such officers’ knowledge, based on such review, the Servicer has fulfilled all of its obligations under this Agreement or other applicable servicing agreement in all material respects throughout such year, or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status of cure provisions thereof. Such Annual Statement of Compliance shall contain no restrictions or limitations on its use.
(b) With respect to any Mortgage Loans that are the subject of a Pass-Through Transfer, using its best efforts to deliver on March 1, but in no event later than March 15, of each calendar year beginning in 2007, an officer of the Servicer shall execute and deliver an Officers’ Certificate (an “Annual Certification”) to the Owner, any Master Servicer and any related Depositor for the benefit of each such entity and such entity’s affiliates and the officers, directors and agents of any such entity and such entity’s affiliates, in the form attached hereto as Exhibit F.
In the event that the Servicer fails to timely comply with this Section 6.04 after the cure period set forth herein, commencing on March 15th of the related year, the Owner shall use its commercially reasonable efforts to obtain written or verbal statements or assurances from the Commission, by March 30th of the related year (or such extension of time granted by the Commission so that it can review the facts surrounding any requests made by the Owner) that such failure to provide the required Assessment of Compliance and Attestation Report on a timely basis, and a one time additional failure by the Servicer to comply with this Section 6.04, will not result in any adverse effect on the Owner or its affiliates with respect to any Shelf Registration on Form S-3 of the Owner or any of its affiliates. Any costs or expenses incurred by the Owner in obtaining such statement or assurances from the Commission shall be reimbursed to the Owner by the Servicer. In the event that the Owner is unable to receive any such assurances from the Commission after the use of such commercially reasonable efforts by March 30th (or any extension period granted by the Commission) of the related year, such failure by the Servicer to comply with this Section 6.04 shall be deemed an Event of Default, automatically at such time, without notice and without any cure period, and Owner may, in addition to whatever rights the Owner may have under Section 8.01, subject to the limitation expressed therein, and at law or equity or to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof without compensating the Servicer for the same, as provided in Section 9.01 . Such termination shall be considered with cause pursuant to Section 10.01 of this Agreement. This paragraph shall supersede any other provision in this Agreement or any other agreement to the contrary.
Failure to provide the Annual Statement of Compliance or Annual Certification will be treated as a failure of the Servicer to perform its duties under the Agreement and will be subject to the indemnification provisions of Section 8.01, subject to the limitation expressed therein, of the Agreement. This indemnification is understood by the parties hereto to cover any gross negligence, bad faith or willful misconduct of the Servicer in connection with its performance hereunder. For any indemnification from the Servicer to any Master Servicer, the Servicer in no event will be liable for punitive or consequential damages, regardless of the form of action, whether in contract, tort or otherwise.
If the indemnification provided for therein is unavailable or insufficient to hold harmless the Owner, each affiliate of the Owner, and each of the following parties participating in a Pass-Through Transfer: each sponsor and issuing entity; each Person (including, but not limited to, any Master Servicer, if applicable) responsible for the preparation, execution or filing of any report required to be filed with the Commission with respect to such Pass-Through Transfer, or for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such Pass-Through Transfer; each broker dealer acting as underwriter, placement agent or initial purchaser, each Person who controls any of such parties or the Depositor (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act); and the respective present and former directors, officers, employees, agents and affiliates of each of the foregoing and of the Depositor (each, an “Indemnified Party”), then the Servicer agrees that it shall contribute to the amount paid or payable by such Indemnified Party as a result of any claims, losses, damages or liabilities incurred by such Indemnified Party in such proportion as is appropriate to reflect the relative fault of such Indemnified Party on the one hand and the Servicer on the other.
In the case of any failure of performance described above, the Servicer shall promptly reimburse the Owner, any Depositor, as applicable, and each Person responsible for the preparation, execution or filing of any report required to be filed with the Commission with respect to such Securitization Transaction, or for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such Securitization Transaction, for all costs reasonably incurred by each such party in order to obtain the information, report, certification, accountants’ letter or other material not delivered as required by the Servicer, any Subservicer or any Subcontractor.
This indemnification shall survive the termination of this Agreement or the termination of any party to this Agreement.
11. Article VI of the Agreement is hereby amended effective as of the date hereof by deleting Section 6.05 in its entirety and replacing it with the following:
Section 6.05 [Reserved].
12. Article VI of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 6.09:
Section 6.09 Assessment of Compliance with Servicing Criteria.
On and after January 1, 2006, the Servicer shall service and administer, and shall cause each subservicer to servicer or administer, the Mortgage Loans in accordance with all applicable requirements of the Servicing Criteria.
With respect to any Mortgage Loans that are the subject of a Pass-Through Transfer, the Servicer shall use its best efforts to deliver to the Owner or its designee, any Master Servicer and any Depositor on March 1, but in no event later than March 15 of each calendar year beginning in 2007 a report (an “Assessment of Compliance”) reasonably satisfactory to the Owner, any Master Servicer and any Depositor regarding the Servicer’s assessment of compliance with the Servicing Criteria during the preceding calendar year as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB or as otherwise required by the Master Servicer. Such report shall be addressed to the Owner and such Depositor and signed by an authorized officer of the Servicer, and shall address each of the Servicing Criteria specified on a certification substantially in the form of Exhibit G hereto delivered to the Owner concurrently with the execution of this Agreement.
With respect to any Mortgage Loans that are the subject of a Pass-Through Transfer, the Servicer shall use its best efforts to deliver to the Owner or its designee, any Master Servicer and any Depositor on March 1, but in no event later than March 15 of each calendar year beginning in 2007 a report (an “Attestation Report”) by a registered public accounting firm that attests to, and reports on, the Assessment of Compliance made by the Servicer, as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB or as otherwise required by the Master Servicer, which Attestation Report must be made in accordance with standards for attestation reports issued or adopted by the Public Servicer Accounting Oversight Board.
The Servicer shall cause each Subservicer, and each Subcontractor determined by the Servicer pursuant to Section 11.19 to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, to deliver to the Owner, any Master Servicer and any Depositor an assessment of compliance and accountants’ attestation as and when provided in Sections 6.09. Each assessment of compliance provided by a Subservicer shall address each of the Servicing Criteria specified on a certification substantially in the form of Exhibit G hereto delivered to the Owner concurrently with the execution of this Agreement or, in the case of a Subservicer subsequently appointed as such, on or prior to the date of such appointment.
In the event that the Servicer fails to timely comply with this Section 6.09 after the cure period set forth herein, commencing on March 15th of the related year, the Owner shall use its commercially reasonable efforts to obtain written or verbal statements or assurances from the Commission, by March 30th of the related year (or such extension of time granted by the Commission so that it can review the facts surrounding any requests made by the Owner) that such failure to provide the required Assessment of Compliance and Attestation Report on a timely basis, and a one time additional failure by the Servicer to comply with this Section 6.09, will not result in any adverse effect on the Owner or its affiliates with respect to any Shelf Registration on Form S-3 of the Owner or any of its affiliates. Any costs or expenses incurred by the Owner in obtaining such statement or assurances from the Commission shall be reimbursed to the Owner by the Servicer. In the event that the Owner is unable to receive any such assurances from the Commission after the use of such commercially reasonable efforts by March 30th (or any extension period granted by the Commission) of the related year, such failure by the Servicer to comply with this Section 6.09 shall be deemed an Event of Default, automatically at such time, without notice and without any cure period, and Owner may, in addition to whatever rights the Owner may have under Section 8.01, subject to the limitation expressed therein, and at law or equity or to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof without compensating the Servicer for the same, as provided in Section 9.01 . Such termination shall be considered with cause pursuant to Section 10.01 of this Agreement. This paragraph shall supersede any other provision in this Agreement or any other agreement to the contrary.
Failure to provide the Assessment of Compliance or Attestation Report will be treated as a failure of the Servicer to perform its duties under the Agreement and will be subject to the indemnification provisions of Section 8.01, subject to the limitation expressed therein, of the Agreement. This indemnification is understood by the parties hereto to cover any gross negligence bad faith or willful misconduct of the Servicer in connection with its performance hereunder. For any indemnification from the Servicer to any Master Servicer, the Servicer in no event will be liable for punitive or consequential damages, regardless of the form of action, whether in contract, tort or otherwise.
This indemnification shall survive the termination of this Agreement or the termination of any party to this Agreement.
13. Article VI of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 6.10:
Section 6.10 Intent of the Parties; Reasonableness.
The Owner and the Servicer acknowledge and agree that a purpose of Section 3.01(m), 4.14, Sections 5.02, 6.04, 6.09 and 10.02 of this Agreement is to facilitate compliance by the Owner and any Depositor with the provisions of Regulation AB and related rules and regulations of the Commission. None of the Owner, any Master Servicer or any Depositor shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder. The Servicer acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with requests made by the Owner or any Depositor in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB. In connection with any Pass-Through Transfer, the Servicer shall cooperate fully with the Owner to deliver to the Owner (including any of its assignees or designees) and any Depositor, any and all statements, reports, certifications, records and any other information necessary in the good faith determination of the Owner or any Depositor to permit the Owner or such Depositor to comply with the provisions of Regulation AB, together with such disclosures relating to the Servicer, any Subservicer, any Third-Party Originator and the Mortgage Loans, or the servicing of the Mortgage Loans, reasonably believed by the Owner or any Depositor to be necessary in order to effect such compliance.
Notwithstanding anything to the contrary herein, the Servicer shall be under no obligation to provide information that the Owner deems required under Regulation AB if (i) the Servicer does not reasonably believe that such information is required under Regulation AB and (ii) the Servicer is not providing such information for its own securitizations unless the Owner pays all reasonable costs incurred by the Servicer in connection with the preparation and delivery of such information and the Servicer is given reasonable time to establish the necessary systems and procedures to produce such information; provided, however, that the costs incurred by the Servicer in connection with establishing the necessary systems and procedures will be split pro rata with any other purchaser that makes a request for similar information.
14. Article IX of the Agreement is hereby amended effective as of the date hereof by deleting the first sentence of the last paragraph of Section 9.01 and replacing it with the following (new text underlined):
then, and in each and every such case, so long as an Event of Default shall not have been remedied, the Owner, by notice in writing to the Servicer (or as otherwise stated herein, in which case, automatically and without notice) may, in addition to whatever rights the Owner may have under Section 8.01, subject to the limitation expressed therein, and at law or equity to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Servicer (and if the Servicer is servicing any of the Mortgage Loans in a Securitization Transaction, appoint a successor servicer reasonably acceptable to any Master Servicer for such Securitization Transaction) under this Agreement and in and to the Mortgage Loans and the proceeds thereof without compensating the Servicer for the same. On or after the receipt by the Servicer of such written notice, all authority and power of the Servicer under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass to and be vested in the successor appointed pursuant to Section 11.01. Upon written request from the Owner, the Servicer shall prepare, execute and deliver, any and all documents and other instruments, place in such successor's possession all Servicing Files, and do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Mortgage Loans and related documents, or otherwise, at the Servicer's sole expense. The Servicer agrees to cooperate with the Owner and such successor in effecting the termination of the Servicer's responsibilities and rights hereunder, including, without limitation, the transfer to such successor for administration by it of all cash amounts which shall at the time be credited by the Servicer to the Custodial Account or Escrow Account or thereafter received with respect to the Mortgage Loans or any REO Property.
15. Article IX of the Agreement is hereby amended effective as of the date hereof by adding the following at the end of the last paragraph of Section 9.01:
The Servicer shall promptly reimburse the Owner (or any designee of the Owner, such as a Master Servicer) and any Depositor, as applicable, for all reasonable expenses incurred by the Owner (or such designee) or such Depositor, as such are incurred, in connection with the termination of the Servicer as servicer and the transfer of servicing of the Mortgage Loans to a successor servicer. The provisions of this paragraph shall not limit whatever rights the Owner or any Depositor may have under other provisions of this Agreement and/or any applicable Reconstitution Agreement or otherwise, whether in equity or at law, such as an action for damages, specific performance or injunctive relief.
16. Article X of the Agreement is hereby amended effective as of the date hereof by restating Section 10.02 in its entirety as follows:
Section 10.02. Cooperation of Servicer with a Reconstitution.
The Servicer and the Owner agree that with respect to some or all of the Mortgage Loans, on or after the related Closing Date, on one or more dates (each a “Reconstitution Date”) at the Owner’s sole option, the Owner may effect a sale (each, a “Reconstitution”) of some or all of the Mortgage Loans then subject to this Agreement, without recourse, to:
(1) one or more third party purchasers in one or more in whole loan transfers (each, a “Whole Loan Transfer”); or
(2) one or more trusts or other entities to be formed as part of one or more Pass-Through Transfers.
With respect to each Whole Loan Transfer or Pass-Through Transfer, as the case may be, the Servicer shall (i) following request by the Owner or any Depositor, use best efforts to provide within five, and in no event later than seven Business Days the Owner and such Depositor (or, as applicable, cause each Subservicer to provide), in writing and in form and substance reasonably satisfactory to the Owner and such Depositor, the information and materials specified in paragraphs (a), (b), (c) and (d) of this Section, and (ii) as promptly as practicable following notice to or discovery by the Servicer, provide to the Owner and any Depositor (in writing and in form and substance reasonably satisfactory to the Owner and such Depositor) the information specified in paragraph (d) of this Section.
(a) If so requested by the Owner or any Depositor, the Servicer shall provide such information regarding the Servicer, as servicer of the Mortgage Loans, and each Subservicer (each of the Servicer and each Subservicer, for purposes of this clause (a), a “Servicer”), as is requested for the purpose of compliance with Item 1108 of Regulation AB. Such information shall include, at a minimum:
(1) the Servicer’s form of organization;
(2) a description of how long the Servicer has been servicing residential mortgage loans; a general discussion of the Servicer’s experience in servicing assets of any type as well as a more detailed discussion of the Servicer’s experience in, and procedures for, the servicing function it will perform under this Agreement and any Reconstitution Agreements; information regarding the size, composition and growth of the Servicer’s portfolio of residential mortgage loans of a type similar to the Mortgage Loans and information on factors related to the Servicer that may be material, in the good faith judgment of the Owner or any Depositor, to any analysis of the servicing of the Mortgage Loans or the related asset-backed securities, as applicable, including, without limitation:
(i) whether any prior securitizations of mortgage loans of a type similar to the Mortgage Loans involving the Servicer have defaulted or experienced an early amortization or other performance triggering event because of servicing during the three-year period immediately preceding the related Securitization Transaction;
(ii) the extent of outsourcing the Servicer utilizes;
(iii) whether there has been previous disclosure of material noncompliance with the applicable servicing criteria with respect to other securitizations of residential mortgage loans involving the Servicer as a servicer during the three-year period immediately preceding the related Securitization Transaction;
(iv) whether the Servicer has been terminated as servicer in a residential mortgage loan securitization, either due to a servicing default or to application of a servicing performance test or trigger; and
(v) such other information as the Owner or any Depositor may reasonably request for the purpose of compliance with Item 1108(b)(2) of Regulation AB;
(3) a description of any material changes during the three-year period immediately preceding the related Securitization Transaction to the Servicer’s policies or procedures with respect to the servicing function it will perform under this Agreement and any Reconstitution Agreements for mortgage loans of a type similar to the Mortgage Loans;
(4) information regarding the Servicer’s financial condition, to the extent that there is a material risk that an adverse financial event or circumstance involving the Servicer could have a material adverse effect on the performance by the Servicer of its servicing obligations under this Agreement or any Reconstitution Agreement;
(5) information regarding advances made by the Servicer on the Mortgage Loans and the Servicer’s overall servicing portfolio of residential mortgage loans for the three-year period immediately preceding the related Securitization Transaction, which may be limited to a statement by an authorized officer of the Servicer to the effect that the Servicer has made all advances required to be made on residential mortgage loans serviced by it during such period, or, if such statement would not be accurate, information regarding the percentage and type of advances not made as required, and the reasons for such failure to advance;
(6) a description of the Servicer’s processes and procedures designed to address any special or unique factors involved in servicing loans of a similar type as the Mortgage Loans;
(7) a description of the Servicer’s processes for handling delinquencies, losses, bankruptcies and recoveries, such as through liquidation of mortgaged properties, sale of defaulted mortgage loans or workouts; and
(8) information as to how the Servicer defines or determines delinquencies and charge-offs, including the effect of any grace period, re-aging, restructuring, partial payments considered current or other practices with respect to delinquency and loss experience.
(b) If so requested by the Owner or any Depositor for the purpose of satisfying its reporting obligation under the Exchange Act with respect to any class of asset-backed securities, the Servicer shall (or shall cause each Subservicer to) (i) notify the Servicer, any Master Servicer and any Depositor in writing of (A) any material litigation or governmental proceedings involving the Company or any Subservicer, (B) any affiliations or relationships that develop following the closing date of a Securitization Transaction between the Owner or any Subservicer and any of the parties specified in clause (D) of paragraph (a) of this Section (and any other parties identified in writing by the requesting party) with respect to such Securitization Transaction, (C) any Event of Default under the terms of this Agreement or any Reconstitution Agreement, (D) any merger, consolidation or sale of substantially all of the assets of the Owner, and (E) the Owner’s entry into an agreement with a Subservicer to perform or assist in the performance of any of the Owner’s obligations under this Agreement or any Reconstitution Agreement and (ii) provide to the Servicer and any Depositor a description of such proceedings, affiliations or relationships.
As a condition to the succession to the Owner or any Subservicer as servicer or subservicer under this Agreement or any Reconstitution Agreement by any Person (i) into which the Owner or such Subservicer may be merged or consolidated, or (ii) which may be appointed as a successor to the Owner or any Subservicer, the Owner shall provide to the Servicer, any Master Servicer, and any Depositor, at least 15 calendar days prior to the effective date of such succession or appointment, (x) written notice to the Servicer and any Depositor of such succession or appointment and (y) in writing and in form and substance reasonably satisfactory to the Servicer and such Depositor, all information reasonably requested by the Servicer or any Depositor in order to comply with its reporting obligation under Item 6.02 of Form 8-K with respect to any class of asset-backed securities;
In addition to such information as the Owner, as servicer, is obligated to provide pursuant to other provisions of this Agreement, not later than ten days prior to the deadline for the filing of any distribution report on Form 10-D in respect of any Securitization Transaction that includes any of the Mortgage Loans serviced by the Owner or any Subservicer, the Owner or such Subservicer, as applicable, shall, to the extent the Owner or such Subservicer has knowledge, provide to the party responsible for filing such report (including, if applicable, the Master Servicer) notice of the occurrence of any of the following events along with all information, data, and materials related thereto as may be required to be included in the related distribution report on Form 10-D (as specified in the provisions of Regulation AB referenced below):
(A) any material modifications, extensions or waivers of pool asset terms, fees, penalties or payments during the distribution period or that have cumulatively become material over time (Item 1121(a)(11) of Regulation AB);
(B) material breaches of pool asset representations or warranties or transaction covenants (Item 1121(a)(12) of Regulation AB); and
(C) information regarding new asset-backed securities issuances backed by the same pool assets, any pool asset changes (such as, additions, substitutions or repurchases), and any material changes in origination, underwriting or other criteria for acquisition or selection of pool assets (Item 1121(a)(14) of Regulation AB); and
The Owner shall provide to the Servicer, any Master Servicer and any Depositor, evidence of the authorization of the person signing any certification or statement, copies or other evidence of Fidelity Bond Insurance and Errors and Omission Insurance policy, financial information and reports, and such other information related to the Owner or any Subservicer or the Owner or such Subservicer’s performance hereunder.
Notwithstanding the foregoing, the Servicer shall be under no obligation to provide information that the Owner deems required under Regulation AB if (i) the Servicer does not reasonably believe that such information is required under Regulation AB and (ii) the Servicer is not providing such information for (A) its own securitizations, or (B) any third party securitizations with mortgage loans serviced by the Servicer[, unless the Owner pays all reasonable actual costs incurred by the Servicer in connection with the preparation and delivery of such information and the Servicer is given reasonable time to establish the necessary systems and procedures to produce such information; provided, however, that the costs incurred by the Servicer in connection with establishing the necessary systems and procedures will be split pro rata with any other purchaser that makes a request for similar information..
All Mortgage Loans not sold or transferred pursuant to a Reconstitution shall remain subject to, and serviced in accordance with the terms of, this Agreement and the related Term Sheet, and with respect thereto this Agreement and the related Term Sheet shall remain in full force and effect.
17. Article XI of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 11.16:
Section 11.16. Use of Subservicers and Subcontractors.
(a) The Servicer shall not hire or otherwise utilize the services of any Subservicer to fulfill any of the obligations of the Servicer as servicer under this Agreement or any Reconstitution Agreement unless the Servicer complies with the provisions of paragraph (b) of this Section. The Servicer shall not hire or otherwise utilize the services of any Subcontractor, and shall not permit any Subservicer to hire or otherwise utilize the services of any Subcontractor, to fulfill any of the obligations of the Servicer as servicer under this Agreement or any Reconstitution Agreement unless the Servicer complies with the provisions of paragraph (d) of this Section.
(b) It shall not be necessary for the Servicer to seek the consent of the Owner to the utilization of any subservicer. The Servicer shall cause any Subservicer used by the Servicer (or by any Subservicer) for the benefit of the Owner and any Depositor to comply with the provisions of this Section and with Sections 3.01(m), 4.14, 6.04, 6.09 and 10.02 of this Agreement to the same extent as if such Subservicer were the Servicer, and to provide the information required with respect to such Subservicer under Section 3.02(b) of this Agreement. The Servicer shall be responsible for obtaining from each Subservicer and delivering to the Owner, any Master Servicer and any Depositor any Annual Statement of Compliance required to be delivered by such Subservicer under Section 6.04(a), any Assessment of Compliance and Attestation Report required to be delivered by such Subservicer under Section 6.09 and any Annual Certification required under Section 6.04(b) as and when required to be delivered.
(c) The Servicer shall promptly upon request provide to the Owner, any Master Servicer and any Depositor (or any designee of the Depositor, such as an administrator) a written description (in form and substance satisfactory to the Owner, any Master Servicer and such Depositor) of the role and function of each Subcontractor utilized by the Servicer or any Subservicer, specifying (i) the identity of each such Subcontractor, (ii) which (if any) of such Subcontractors are “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, and (iii) which elements of the Servicing Criteria will be addressed in assessments of compliance provided by each Subcontractor identified pursuant to clause (ii) of this paragraph.
(d) As a condition to the utilization of any Subcontractor determined to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, the Servicer shall cause any such Subcontractor used by the Servicer (or by any Subservicer) for the benefit of the Owner and any Depositor to comply with the provisions of Sections 6.09 and 10.02 of this Agreement to the same extent as if such Subcontractor were the Servicer. The Servicer shall be responsible for obtaining from each Subcontractor and delivering to the Owner and any Depositor any Assessment of Compliance and Attestation Report and the other certificates required to be delivered by such Subservicer and such Subcontractor under Section 6.09, in each case as and when required to be delivered.
18. Article XI of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 11.17:
For purposes of this Agreement, and with respect to any Mortgage Loan in a Pass-Through Transfer, the related Master Servicer shall be considered a third party beneficiary to this Agreement, entitled to all the rights and benefits hereof as if it were a direct party to this Agreement, with respect to such Mortgage Loans.
19. The Agreement is hereby amended effective as of the date hereof by deleting Exhibit E in its entirety and replacing it with the following:
EXHIBIT E
REPORTING DATA FOR MONTHLY REPORT
Standard File Layout - Master Servicing
Column Name	Description	Decimal	Format Comment	Max Size
SER_INVESTOR_NBR	A value assigned by the Servicer to define a group of loans.		Text up to 10 digits	20
LOAN_NBR	A unique identifier assigned to each loan by the investor.		Text up to 10 digits	10
SERVICER_LOAN_NBR	A unique number assigned to a loan by the Servicer. This may be different than the LOAN_NBR.		Text up to 10 digits	10
BORROWER_NAME	The borrower name as received in the file. It is not separated by first and last name.		Maximum length of 30 (Last, First)	30
SCHED_PAY_AMT	Scheduled monthly principal and scheduled interest payment that a borrower is expected to pay, P&I constant.	2	No commas(,) or dollar signs ($)	11
NOTE_INT_RATE	The loan interest rate as reported by the Servicer.	4	Max length of 6	6
NET_INT_RATE	The loan gross interest rate less the service fee rate as reported by the Servicer.	4	Max length of 6	6
SERV_FEE_RATE	The servicer's fee rate for a loan as reported by the Servicer.	4	Max length of 6	6
SERV_FEE_AMT	The servicer's fee amount for a loan as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11
NEW_PAY_AMT	The new loan payment amount as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11
NEW_LOAN_RATE	The new loan rate as reported by the Servicer.	4	Max length of 6	6
ARM_INDEX_RATE	The index the Servicer is using to calculate a forecasted rate.	4	Max length of 6	6
ACTL_BEG_PRIN_BAL	The borrower's actual principal balance at the beginning of the processing cycle.	2	No commas(,) or dollar signs ($)	11
ACTL_END_PRIN_BAL	The borrower's actual principal balance at the end of the processing cycle.	2	No commas(,) or dollar signs ($)	11
BORR_NEXT_PAY_DUE_DATE	The date at the end of processing cycle that the borrower's next payment is due to the Servicer, as reported by Servicer.		MM/DD/YYYY	10
SERV_CURT_AMT_1	The first curtailment amount to be applied.	2	No commas(,) or dollar signs ($)	11
SERV_CURT_DATE_1	The curtailment date associated with the first curtailment amount.		MM/DD/YYYY	10
CURT_ADJ_ AMT_1	The curtailment interest on the first curtailment amount, if applicable.	2	No commas(,) or dollar signs ($)	11
SERV_CURT_AMT_2	The second curtailment amount to be applied.	2	No commas(,) or dollar signs ($)	11
SERV_CURT_DATE_2	The curtailment date associated with the second curtailment amount.		MM/DD/YYYY	10
CURT_ADJ_ AMT_2	The curtailment interest on the second curtailment amount, if applicable.	2	No commas(,) or dollar signs ($)	11
SERV_CURT_AMT_3	The third curtailment amount to be applied.	2	No commas(,) or dollar signs ($)	11
SERV_CURT_DATE_3	The curtailment date associated with the third curtailment amount.		MM/DD/YYYY	10
CURT_ADJ_AMT_3	The curtailment interest on the third curtailment amount, if applicable.	2	No commas(,) or dollar signs ($)	11
PIF_AMT	The loan "paid in full" amount as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11
PIF_DATE	The paid in full date as reported by the Servicer.		MM/DD/YYYY	10
			Action Code Key: 15=Bankruptcy, 30=Foreclosure, , 60=PIF, 63=Substitution, 65=Repurchase,70=REO	2
ACTION_CODE	The standard FNMA numeric code used to indicate the default/delinquent status of a particular loan.			2
INT_ADJ_AMT	The amount of the interest adjustment as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11
SOLDIER_SAILOR_ADJ_AMT	The Soldier and Sailor Adjustment amount, if applicable.	2	No commas(,) or dollar signs ($)	11
NON_ADV_LOAN_AMT	The Non Recoverable Loan Amount, if applicable.	2	No commas(,) or dollar signs ($)	11
LOAN_LOSS_AMT	The amount the Servicer is passing as a loss, if applicable.	2	No commas(,) or dollar signs ($)	11
SCHED_BEG_PRIN_BAL	The scheduled outstanding principal amount due at the beginning of the cycle date to be passed through to investors.	2	No commas(,) or dollar signs ($)	11
SCHED_END_PRIN_BAL	The scheduled principal balance due to investors at the end of a processing cycle.	2	No commas(,) or dollar signs ($)	11
SCHED_PRIN_AMT	The scheduled principal amount as reported by the Servicer for the current cycle -- only applicable for Scheduled/Scheduled Loans.	2	No commas(,) or dollar signs ($)	11
SCHED_NET_INT	The scheduled gross interest amount less the service fee amount for the current cycle as reported by the Servicer -- only applicable for Scheduled/Scheduled Loans.	2	No commas(,) or dollar signs ($)	11
ACTL_PRIN_AMT	The actual principal amount collected by the Servicer for the current reporting cycle -- only applicable for Actual/Actual Loans.	2	No commas(,) or dollar signs ($)	11
ACTL_NET_INT	The actual gross interest amount less the service fee amount for the current reporting cycle as reported by the Servicer -- only applicable for Actual/Actual Loans.	2	No commas(,) or dollar signs ($)	11
PREPAY_PENALTY_ AMT	The penalty amount received when a borrower prepays on his loan as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11
PREPAY_PENALTY_ WAIVED	The prepayment penalty amount for the loan waived by the servicer.	2	No commas(,) or dollar signs ($)	11
MOD_DATE	The Effective Payment Date of the Modification for the loan.		MM/DD/YYYY	10
MOD_TYPE	The Modification Type.		Varchar - value can be alpha or numeric	30
DELINQ_P&I_ADVANCE_AMT	The current outstanding principal and interest advances made by Servicer.	2	No commas(,) or dollar signs ($)	11
20. The Agreement is hereby amended effective as of the date hereof by adding the following new Exhibit F:
EXHIBIT F
FORM OF SERVICER CERTIFICATION
Re: The [ ] agreement dated as of [ l, 200[ ] (the “Agreement”), among [IDENTIFY PARTIES]
I, ____________________________, the _______________________ of [NAME OF SERVICER] (the “Company”), certify to [the Purchaser], [the Depositor], and the [Master Servicer] [Securities Administrator] [Trustee], and their officers, with the knowledge and intent that they will rely upon this certification, that:
I have reviewed the servicer compliance statement of the Company provided in accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the report on assessment of the Company’s compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing Assessment”), the registered public accounting firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all servicing reports, officer’s certificates and other information relating to the servicing of the Mortgage Loans by the Company during 200[ ] that were delivered by the Company to the [Depositor] [Master Servicer] [Securities Administrator] [Trustee] pursuant to the Agreement (collectively, the “Company Servicing Information”);
Based on my knowledge, the Company Servicing Information, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the circumstances under which such statements were made, not misleading with respect to the period of time covered by the Company Servicing Information;
Based on my knowledge, all of the Company Servicing Information required to be provided by the Company under the Agreement has been provided to the [Depositor] [Master Servicer] [Securities Administrator] [Trustee];
I am responsible for reviewing the activities performed by the Company as servicer under the Agreement, and based on my knowledge and the compliance review conducted in preparing the Compliance Statement and except as disclosed in the Compliance Statement, the Servicing Assessment or the Attestation Report, the Company has fulfilled its obligations under the Agreement in all material respects; and
The Compliance Statement required to be delivered by the Company pursuant to this Agreement, and the Servicing Assessment and Attestation Report required to be provided by the Company and by any Subservicer and Subcontractor pursuant to the Agreement, have been provided to the [Depositor] [Master Servicer]. Any material instances of noncompliance described in such reports have been disclosed to the [Depositor] [Master Servicer]. Any material instance of noncompliance with the Servicing Criteria has been disclosed in such reports.
21. The Agreement is hereby amended effective as of the date hereof by adding the following new Exhibit G:
EXHIBIT G
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Servicer] [Name of Subservicer] shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria”:
*Servicing Criteria*		*Applicable Servicing Criteria*
Reference	Criteria
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.
	Cash Collection and Administration
1122(d)(2)(i)	Payments on mortgage loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of mortgage loans serviced by the Servicer.
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on mortgage loans is maintained as required by the transaction agreements or related mortgage loan documents.
1122(d)(4)(ii)	Mortgage loan and related documents are safeguarded as required by the transaction agreements
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.
1122(d)(4)(iv)	Payments on mortgage loans, including any payoffs, made in accordance with the related mortgage loan documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related mortgage loan documents.
1122(d)(4)(v)	The Servicer’s records regarding the mortgage loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor's mortgage loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a mortgage loan is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent mortgage loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for mortgage loans with variable rates are computed based on the related mortgage loan documents.
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s mortgage loan documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable mortgage loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related mortgage loans, or such other number of days specified in the transaction agreements.
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.
[NAME OF COMPANY] [NAME OF SUBSERVICER]
Date: _________________________
By: _________________________
Name:
Title:
22. The Agreement is hereby amended effective as of the date hereof by adding the following new Exhibit H:
EXHIBIT H
REPORTING DATA FOR DEFAULTED LOANS
Standard File Layout - Delinquency Reporting
Column/Header Name	Description	Decimal	Format Comment
SERVICER_LOAN_NBR	A unique number assigned to a loan by the Servicer. This may be different than the LOAN_NBR
LOAN_NBR	A unique identifier assigned to each loan by the originator.
CLIENT_NBR	Servicer Client Number
SERV_INVESTOR_NBR	Contains a unique number as assigned by an external servicer to identify a group of loans in their system.
BORROWER_FIRST_NAME	First Name of the Borrower.
BORROWER_LAST_NAME	Last name of the borrower.
PROP_ADDRESS	Street Name and Number of Property
PROP_STATE	The state where the property located.
PROP_ZIP	Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE	The date that the borrower's next payment is due to the servicer at the end of processing cycle, as reported by Servicer.		MM/DD/YYYY
LOAN_TYPE	Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE	The date a particular bankruptcy claim was filed.		MM/DD/YYYY
BANKRUPTCY_CHAPTER_CODE	The chapter under which the bankruptcy was filed.
BANKRUPTCY_CASE_NBR	The case number assigned by the court to the bankruptcy filing.
POST_PETITION_DUE_DATE	The payment due date once the bankruptcy has been approved by the courts		MM/DD/YYYY
BANKRUPTCY_DCHRG_DISM_DATE	The Date The Loan Is Removed From Bankruptcy. Either by Dismissal, Discharged and/or a Motion For Relief Was Granted.		MM/DD/YYYY
LOSS_MIT_APPR_DATE	The Date The Loss Mitigation Was Approved By The Servicer		MM/DD/YYYY
LOSS_MIT_TYPE	The Type Of Loss Mitigation Approved For A Loan Such As;
LOSS_MIT_EST_COMP_DATE	The Date The Loss Mitigation /Plan Is Scheduled To End/Close		MM/DD/YYYY
LOSS_MIT_ACT_COMP_DATE	The Date The Loss Mitigation Is Actually Completed		MM/DD/YYYY
FRCLSR_APPROVED_DATE	The date DA Admin sends a letter to the servicer with instructions to begin foreclosure proceedings.		MM/DD/YYYY
ATTORNEY_REFERRAL_DATE	Date File Was Referred To Attorney to Pursue Foreclosure		MM/DD/YYYY
FIRST_LEGAL_DATE	Notice of 1st legal filed by an Attorney in a Foreclosure Action		MM/DD/YYYY
FRCLSR_SALE_EXPECTED_DATE	The date by which a foreclosure sale is expected to occur.		MM/DD/YYYY
FRCLSR_SALE_DATE	The actual date of the foreclosure sale.		MM/DD/YYYY
FRCLSR_SALE_AMT	The amount a property sold for at the foreclosure sale.	2	No commas(,) or dollar signs ($)
EVICTION_START_DATE	The date the servicer initiates eviction of the borrower.		MM/DD/YYYY
EVICTION_COMPLETED_DATE	The date the court revokes legal possession of the property from the borrower.		MM/DD/YYYY
LIST_PRICE	The price at which an REO property is marketed.	2	No commas(,) or dollar signs ($)
LIST_DATE	The date an REO property is listed at a particular price.		MM/DD/YYYY
OFFER_AMT	The dollar value of an offer for an REO property.	2	No commas(,) or dollar signs ($)
OFFER_DATE_TIME	The date an offer is received by DA Admin or by the Servicer.		MM/DD/YYYY
REO_CLOSING_DATE	The date the REO sale of the property is scheduled to close.		MM/DD/YYYY
REO_ACTUAL_CLOSING_DATE	Actual Date Of REO Sale		MM/DD/YYYY
OCCUPANT_CODE	Classification of how the property is occupied.
PROP_CONDITION_CODE	A code that indicates the condition of the property.
PROP_INSPECTION_DATE	The date a property inspection is performed.		MM/DD/YYYY
APPRAISAL_DATE	The date the appraisal was done.		MM/DD/YYYY
CURR_PROP_VAL	The current "as is" value of the property based on brokers price opinion or appraisal.	2
REPAIRED_PROP_VAL	The amount the property would be worth if repairs are completed pursuant to a broker's price opinion or appraisal.	2
If applicable:
DELINQ_STATUS_CODE	FNMA Code Describing Status of Loan
DELINQ_REASON_CODE	The circumstances which caused a borrower to stop paying on a loan. Code indicates the reason why the loan is in default for this cycle.
MI_CLAIM_FILED_DATE	Date Mortgage Insurance Claim Was Filed With Mortgage Insurance Company.		MM/DD/YYYY
MI_CLAIM_AMT	Amount of Mortgage Insurance Claim Filed		No commas(,) or dollar signs ($)
MI_CLAIM_PAID_DATE	Date Mortgage Insurance Company Disbursed Claim Payment		MM/DD/YYYY
MI_CLAIM_AMT_PAID	Amount Mortgage Insurance Company Paid On Claim	2	No commas(,) or dollar signs ($)
POOL_CLAIM_FILED_DATE	Date Claim Was Filed With Pool Insurance Company		MM/DD/YYYY
POOL_CLAIM_AMT	Amount of Claim Filed With Pool Insurance Company	2	No commas(,) or dollar signs ($)
POOL_CLAIM_PAID_DATE	Date Claim Was Settled and The Check Was Issued By The Pool Insurer		MM/DD/YYYY
POOL_CLAIM_AMT_PAID	Amount Paid On Claim By Pool Insurance Company	2	No commas(,) or dollar signs ($)
FHA_PART_A_CLAIM_FILED_DATE	Date FHA Part A Claim Was Filed With HUD		MM/DD/YYYY
FHA_PART_A_CLAIM_AMT	Amount of FHA Part A Claim Filed	2	No commas(,) or dollar signs ($)
FHA_PART_A_CLAIM_PAID_DATE	Date HUD Disbursed Part A Claim Payment		MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT	Amount HUD Paid on Part A Claim	2	No commas(,) or dollar signs ($)
FHA_PART_B_CLAIM_FILED_DATE	Date FHA Part B Claim Was Filed With HUD		MM/DD/YYYY
FHA_PART_B_CLAIM_AMT	Amount of FHA Part B Claim Filed	2	No commas(,) or dollar signs ($)
FHA_PART_B_CLAIM_PAID_DATE	Date HUD Disbursed Part B Claim Payment		MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT	Amount HUD Paid on Part B Claim	2	No commas(,) or dollar signs ($)
VA_CLAIM_FILED_DATE	Date VA Claim Was Filed With the Veterans Admin		MM/DD/YYYY
VA_CLAIM_PAID_DATE	Date Veterans Admin. Disbursed VA Claim Payment		MM/DD/YYYY
VA_CLAIM_PAID_AMT	Amount Veterans Admin. Paid on VA Claim	2	No commas(,) or dollar signs ($)
Exhibit 2: Standard File Codes - Delinquency Reporting
The Loss Mit Type field should show the approved Loss Mitigation Code as follows:
·	ASUM-Approved Assumption
·	BAP-Borrower Assistance Program
·	CO- Charge Off
·	DIL- Deed-in-Lieu
·	FFA- Formal Forbearance Agreement
·	MOD- Loan Modification
·	PRE- Pre-Sale
·	SS- Short Sale
·	MISC-Anything else approved by the PMI or Pool Insurer
NOTE: Wells Fargo Bank will accept alternative Loss Mitigation Types to those above, provided that they are consistent with industry standards. If Loss Mitigation Types other than those above are used, the Servicer must supply Wells Fargo Bank with a description of each of the Loss Mitigation Types prior to sending the file.
The Occupant Code field should show the current status of the property code as follows:
Mortgagor
Tenant
Unknown
Vacant
The Property Condition field should show the last reported condition of the property as follows:
Damaged
Excellent
Fair
Gone
Good
Poor
·	Special Hazard
Unknown
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as follows:
Delinquency Code	Delinquency Description
001	FNMA-Death of principal mortgagor
002	FNMA-Illness of principal mortgagor
003	FNMA-Illness of mortgagor’s family member
004	FNMA-Death of mortgagor’s family member
005	FNMA-Marital difficulties
006	FNMA-Curtailment of income
007	FNMA-Excessive Obligation
008	FNMA-Abandonment of property
009	FNMA-Distant employee transfer
011	FNMA-Property problem
012	FNMA-Inability to sell property
013	FNMA-Inability to rent property
014	FNMA-Military Service
015	FNMA-Other
016	FNMA-Unemployment
017	FNMA-Business failure
019	FNMA-Casualty loss
022	FNMA-Energy environment costs
023	FNMA-Servicing problems
026	FNMA-Payment adjustment
027	FNMA-Payment dispute
029	FNMA-Transfer of ownership pending
030	FNMA-Fraud
031	FNMA-Unable to contact borrower
INC	FNMA-Incarceration
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Status Code field should show the Status of Default as follows:
Status Code	Status Description
09	Forbearance
17	Pre-foreclosure Sale Closing Plan Accepted
24	Government Seizure
26	Refinance
27	Assumption
28	Modification
29	Charge-Off
30	Third Party Sale
31	Probate
32	Military Indulgence
43	Foreclosure Started
44	Deed-in-Lieu Started
49	Assignment Completed
61	Second Lien Considerations
62	Veteran’s Affairs-No Bid
63	Veteran’s Affairs-Refund
64	Veteran’s Affairs-Buydown
65	Chapter 7 Bankruptcy
66	Chapter 11 Bankruptcy
67	Chapter 13 Bankruptcy
23. The Agreement is hereby amended effective as of the date hereof by adding the following new Exhibit I:
EXHIBIT I
REPORTING DATA FOR REALIZED LOSSES AND GAINS
Calculation of Realized Loss/Gain Form 332- Instruction Sheet
NOTE: Do not net or combine items. Show all expenses individually and all credits as separate line items. Claim packages are due on the remittance report date. Late submissions may result in claims not being passed until the following month. The Servicer is responsible to remit all funds pending loss approval and /or resolution of any disputed items.
2. The numbers on the 332 form correspond with the numbers listed below.
Liquidation and Acquisition Expenses:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For documentation, an Amortization Schedule from date of default through liquidation breaking out the net interest and servicing fees advanced is required.
2. The Total Interest Due less the aggregate amount of servicing fee that would have been earned if all delinquent payments had been made as agreed. For documentation, an Amortization Schedule from date of default through liquidation breaking out the net interest and servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of the Mortgage Loan as calculated on a monthly basis. For documentation, an Amortization Schedule from date of default through liquidation breaking out the net interest and servicing fees advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form - breakdown required showing period
of coverage, base tax, interest, penalty. Advances prior to default require evidence of servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and WFB’s approved Officer Certificate
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
3. Credits:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3^rd Party Sale, bid instructions and Escrow Agent / Attorney
Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22.
The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial proceeds and line (18b) for Part B/Supplemental proceeds.
Total Realized Loss (or Amount of Any Gain)
23. The total derived from subtracting line 22 from 13. If the amount represents a realized gain, show the amount in parenthesis ( ).
Calculation of Realized Loss/Gain Form 332
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address:_____________________
Servicer Loan No.
Servicer Name
Servicer Address
WELLS FARGO BANK, N.A. Loan No._____________________________
Borrower's Name: _________________________________________________________
Property Address: _________________________________________________________
Liquidation Type: REO Sale 3^rd Party Sale Short Sale Charge Off
Was this loan granted a Bankruptcy deficiency or cramdown Yes No
If “Yes”, provide deficiency or cramdown amount _______________________________
Liquidation and Acquisition Expenses:
(1) Actual Unpaid Principal Balance of Mortgage Loan $ ______________ (1)
(2) Interest accrued at Net Rate ________________ (2)
(3) Accrued Servicing Fees ________________ (3)
(4) Attorney's Fees ________________ (4)
(5) Taxes (see page 2) ________________ (5)
(6) Property Maintenance ________________ (6)
(7) MI/Hazard Insurance Premiums (see page 2) ________________ (7)
(8) Utility Expenses ________________ (8)
(9) Appraisal/BPO ________________ (9)
(10) Property Inspections ________________ (10)
(11) FC Costs/Other Legal Expenses ________________ (11)
(12) Other (itemize) ________________ (12)
Cash for Keys__________________________ ________________ (12)
HOA/Condo Fees_______________________ ________________ (12)
______________________________________ ________________ (12)
Total Expenses $ _______________ (13)
Credits:
(14) Escrow Balance $ _______________ (14)
(15) HIP Refund ________________ (15)
(16) Rental Receipts ________________ (16)
(17) Hazard Loss Proceeds ________________ (17)
(18) Primary Mortgage Insurance / Gov’t Insurance ________________ (18a) HUD Part A
________________ (18b) HUD Part B
(19) Pool Insurance Proceeds ________________ (19)
(20) Proceeds from Sale of Acquired Property ________________ (20)
(21) Other (itemize) ________________ (21)
_________________________________________ ________________ (21)
Total Credits $________________ (22)
Total Realized Loss (or Amount of Gain) $________________ (23)
Escrow Disbursement Detail
Type (Tax /Ins.)	Date Paid	Period of Coverage	Total Paid	Base Amount	Penalties	Interest
24. Except as amended above, the Agreement shall continue to be in full force and effect in accordance with its terms.
25. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts and of said counterparts taken together shall be deemed to constitute one and the same instrument.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the following parties have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.
EMC MORTGAGE CORPORATION,
as Owner
By:
Name:
Title:
GMAC MORTGAGE CORPORATION,
as Servicer
By:
Name:
Title:
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This Assignment, Assumption and Recognition Agreement (this “AAR Agreement”) is made and entered into as of April 30, 2007 (the “Closing Date”), among EMC Mortgage Corporation (the “Assignor”), Citibank, N.A., not individually but solely as indenture trustee for the holders of Bear Stearns Second Lien Trust 2007-1, Mortgage-Backed Notes, Series 2007-1 (the “Assignee”) and GMAC Mortgage, LLC (the “Company”).
Whereas, the Assignor purchased mortgage loans from the Company (the “Mortgage Loans”) pursuant to that certain Mortgage Loan Purchase and Interim Servicing Agreement dated as of January 1, 2006, and the related Term Sheets and Assignment and Assumption Agreements (collectively, the “Purchase Agreements”).
Whereas, the Assignor and the Company entered into that certain Servicing Agreement, dated as of May 1, 2001, as amended by Amendment No. 1, dated as of October 1, 2001, Amendment No. 2, dated as of July 31, 2002 and the Amended and Restated Amendment No. 3, dated as of December 20, 2005 (as amended, the “Servicing Agreement”), pursuant to which the Company agreed to service the Mortgage Loans.
In consideration of the mutual promises and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Mortgage Loans listed on Attachment 1 annexed hereto (the “Assigned Loans”) shall be subject to the terms of this AAR Agreement. Any capitalized term used and not otherwise defined herein shall have the meaning assigned to such term in the Servicing Agreement.
Assignment and Assumption
1. Except as expressly provided for herein, the Assignor hereby grants, transfers and assigns to the Assignee all of its right, title and interest in, to and under (a) the Assigned Loans and (b) as it relates to the Assigned Loans, the Servicing Agreement. Notwithstanding anything to the contrary contained herein, the Assignor is not assigning to the Assignee any of its right, title and interest in, to and under the Servicing Agreement with respect to any other mortgage loan other than the Assigned Loans. Notwithstanding anything to the contrary contained herein, the Assignor specifically reserves and does not assign to the Assignee any right, title and interest in, to or under the representations and warranties contained in the relevant sections of the Purchase Agreements, and any obligation of the Sellers to cure, repurchase or substitute for a mortgage loan and to indemnify the Assignor with respect to a breach of such representations and warranties pursuant to the relevant sections of the Purchase Agreements, and the Assignor is retaining the right to enforce the representations and warranties and the obligations of the Sellers set forth in those sections against the Sellers. The Assignor specifically reserves and does not assign to the Assignee its obligation, as set forth in (i) the second sentence of the fourth to last paragraph of Section 5.02 of the Servicing Agreement, (ii) the second paragraph of Section 6.10 of the Servicing Agreement and (iii) the second to last paragraph of Section 10.02(b) of the Servicing Agreement. Except as is otherwise expressly provided herein, the Assignor makes no representations, warranties or covenants to the Assignee and the Assignee acknowledges that the Assignor has no obligations to the Assignee under the terms of the Servicing Agreement or otherwise relating to the transaction contemplated herein (including, but not limited to, any obligation to indemnify the Assignee).
Assignor acknowledges and agrees that upon execution of this AAR Agreement, the Assignee shall become the “Owner” under the Servicing Agreement, and all representations, warranties and covenants by the “Servicer” to the “Owner” under the Servicing Agreement including, but not limited to, the rights to receive indemnification, shall accrue to Assignee by virtue of this AAR Agreement.
Representations, Warranties and Covenants
2. Assignor warrants and represents to, and covenants with, Assignee, the Note Insurer and Company as of the date hereof that:
a. Attached hereto as Attachment 2 is a true and correct copy of the Servicing Agreement, which Servicing Agreement is in full force and effect as of the date hereof and the provisions of which have not been waived, amended or modified in any respect, nor has any notice of termination been given thereunder;
b. Assignor is the lawful owner of the Assigned Loans with full right to transfer the Assigned Loans and any and all of its interests, rights and obligations under the Servicing Agreement as they relate to the Assigned Loans, free and clear from any and all claims and encumbrances; and upon the transfer of the Assigned Loans to Assignee as contemplated herein, Assignee shall have good title to each and every Assigned Loan, as well as any and all of Assignee’s interests, rights and obligations under the Servicing Agreement as they relate to the Assigned Loans, free and clear of any and all liens, claims and encumbrances;
c. There are no offsets, counterclaims or other defenses available to the Company with respect to the Assigned Loans, the Purchase Agreements or the Servicing Agreement;
d. Assignor has no knowledge of, and has not received notice of, any waivers under, or any modification of, any Assigned Loan;
e. Assignor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite power and authority to acquire, own and sell the Assigned Loans;
f. Assignor has full corporate power and authority to execute, deliver and perform its obligations under this AAR Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this AAR Agreement is in the ordinary course of Assignor’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of Assignor’s charter or by-laws or any legal restriction, or any material agreement or instrument to which Assignor is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which Assignor or its property is subject. The execution, delivery and performance by Assignor of this AAR Agreement and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on part of Assignor. This AAR Agreement has been duly executed and delivered by Assignor and, upon the due authorization, execution and delivery by Assignee and the parties hereto, will constitute the valid and legally binding obligation of Assignor enforceable against Assignor in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law; and
g. No consent, approval, order or authorization of, or declaration, filing or registration with, any governmental entity is required to be obtained or made by Assignor in connection with the execution, delivery or performance by Assignor of this AAR Agreement, or the consummation by it of the transactions contemplated hereby. Neither Assignor nor anyone acting on its behalf has offered, transferred, pledged, sold or otherwise disposed of the Assigned Loans or any interest in the Assigned Loans, or solicited any offer to buy or accept a transfer, pledge or other disposition of the Assigned Loans, or any interest in the Assigned Loans or otherwise approached or negotiated with respect to the Assigned Loans, or any interest in the Assigned Loans with any Person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action which would constitute a distribution of the Assigned Loans under the Securities Act of 1933, as amended (the “1933 Act”) or which would render the disposition of the Assigned Loans a violation of Section 5 of the 1933 Act or require registration pursuant thereto.
3. The Assignee warrants and represents to, and covenants with, the Assignor, the Note Insurer and the Company as of the date hereof that:
a. Assignee is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to hold the Assigned Loans as indenture trustee on behalf of the holders of Bear Stearns Second Lien Trust 2007-1, Mortgage-Backed Notes, Series 2007-1;
b. Assignee has full corporate power and authority to execute, deliver and perform under this AAR Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this AAR Agreement is in the ordinary course of Assignee’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of Assignee’s organizational documents or any legal restriction, or any material agreement or instrument to which Assignee is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which Assignee or its property is subject. The execution, delivery and performance by Assignee of this AAR Agreement and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on part of Assignee. This AAR Agreement has been duly executed and delivered by Assignee and, upon the due authorization, execution and delivery by Assignor and the parties hereto, will constitute the valid and legally binding obligation of Assignee enforceable against Assignee in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law;
c. No consent, approval, order or authorization of, or declaration, filing or registration with, any governmental entity is required to be obtained or made by Assignee in connection with the execution, delivery or performance by Assignee of this AAR Agreement, or the consummation by it of the transactions contemplated hereby; and
d. The Assignee assumes all of the rights of the Owner under the Servicing Agreement with respect to the Assigned Loans other than the right to enforce the obligations of the Servicer under the Servicing Agreement.
4. The Company warrants and represents to, and covenants with, Assignee, the Note Insurer and Assignor, as of the date hereof, that:
a. Attached hereto as Attachment 2 is a true and correct copy of the Servicing Agreement, which agreement is in full force and effect as of the date hereof and the provisions of which have not been waived, amended or modified in any respect, nor has any notice of termination been given thereunder;
b. Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and has all requisite power and authority to service the Assigned Loans and otherwise to perform its obligations under the Servicing Agreement;
c. Company has full corporate power and authority to execute, deliver and perform its obligations under this AAR Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this AAR Agreement is in the ordinary course of Company’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of Company’s limited liability company agreement or any legal restriction, or any material agreement or instrument to which Company is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which Company or its property is subject. The execution, delivery and performance by Company of this AAR Agreement and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on part of Company. This AAR Agreement has been duly executed and delivered by Company, and, upon the due authorization, execution and delivery by Assignor and Assignee, will constitute the valid and legally binding obligation of Company, enforceable against Company in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law;
d. No consent, approval, order or authorization of, or declaration, filing or registration with, any governmental entity is required to be obtained or made by Company in connection with the execution, delivery or performance by Company of this AAR Agreement, or the consummation by it of the transactions contemplated hereby;
e. Company shall establish a Custodial Account and an Escrow Account under the Servicing Agreement in favor of Assignee with respect to the Assigned Loans separate from the Custodial Account and Escrow Account previously established under the Servicing Agreement in favor of Assignor;
f. Pursuant to Section 10.02 of the Servicing Agreement, the Company hereby restates the representations and warranties set forth in Article III of the Servicing Agreement with respect to the Company and the Assigned Loans as of the date hereof, provided that Section 3.01(a) is hereby amended by deleting “corporation” and replacing it with “limited liability company” and 3.01(c) is hereby amended by deleting “articles of incorporation or by-laws” and replacing it with “limited liability company agreement”; and
g. Neither this AAR Agreement nor any certification, statement, report or other agreement, document or instrument furnished or to be furnished by the Company pursuant to this AAR Agreement contains or will contain any materially untrue statement of fact or omits or will omit to state a fact necessary to make the statements contained therein not misleading.
5. Company warrants and represents to, and covenants with, Assignor, the Note Insurer and Bear Stearns Asset Backed Securities I LLC (“BSABS I”) as of the date hereof:
a. Company is not aware and has not received notice that any default, early amortization or other performance triggering event has occurred as to any other securitization due to any act or failure to act of the Company;
b. No material noncompliance with the applicable servicing criteria with respect to other securitizations of residential mortgage loans involving the Company as servicer has been disclosed or reported by the Company;
c. Company has not been terminated as servicer in a residential mortgage loan securitization, either due to a servicing default or to application of a servicing performance test or trigger;
d. No material changes to the Company’s policies or procedures with respect to the servicing function it will perform under the Servicing Agreement and this AAR Agreement for mortgage loans of a type similar to the Assigned Loans have occurred during the three-year period immediately preceding the date hereof;
e. There are no aspects of the Company’s financial condition that could have a material adverse effect on the performance by the Company of its servicing obligations under the Servicing Agreement and this AAR Agreement;
f. There are no material legal or governmental proceedings pending (or known to be contemplated) against the Company, any Subservicer or any third-party originator; and
g. There are no affiliations, relationships or transactions relating to the Company or any Subservicer with respect to this Securitization Transaction and any party thereto of a type described in Item 1119 of Regulation AB.
Notwithstanding anything to the contrary in the Agreement, the Company shall (or shall cause any Third-Party Originator to) (i) immediately notify Assignor and BSABS I in writing of (A) legal proceedings pending against the Company, or proceedings known to be contemplated by governmental authorities against the Company which in the judgment of the Company would be, in each case, material to purchasers of securities backed by the Assigned Loans, (B) any affiliations or relationships of the type described in Item 1119(b) of Regulation AB that develop following the date hereof between the Company and any of the above listed parties or other parties identified in writing by the Assignor or BSABS I with respect to the Securitization Transaction and (ii) provide to the Assignor and BSABS I a description of such proceedings, affiliations or relationships.
Each such notice/update should be sent to the Assignor by e-mail to regABnotifications@bear.com. Additionally, all such notifications, other than those pursuant to (i)(A) above, should be sent to:
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751
With a copy to:
Bear, Stearns & Co. Inc.
383 Madison Avenue, 3rd Floor
New, York, NY 10179
Attention: Global Credit Administration
Facsimile: (212) 272-6564
Notifications pursuant to (i)(A) above should be sent to:
EMC Mortgage Corporation
2780 Lake Vista Drive
Lewisville, TX 75067
Attention: General Counsel
Facsimile: (469) 759-4714
With copies to:
Bear, Stearns & Co. Inc.
383 Madison Avenue, 3rd Floor
New, York, NY 10179
Attention: Global Credit Administration
Facsimile: (212) 272-6564
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751
6. Assignor hereby agrees to indemnify and hold the Assignee and the Note Insurer (and their respective successors and assigns) harmless against any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that Assignee and the Note Insurer (and their respective successors and assigns) may sustain in any way related to any breach of the representations or warranties of Assignor set forth in this AAR Agreement or the breach of any covenant or condition contained herein.
7. It is expressly understood and agreed by the parties hereto that insofar as this AAR Agreement is executed on behalf of the Assignee (i) this AAR Agreement is executed and delivered by Citibank, N.A., not in its individual capacity but solely as indenture trustee under the Sale and Servicing Agreement, dated as of April 30, 2007 (the “Sale and Servicing Agreement”), among the Assignor, BSABS I, Citibank, N.A., as indenture trustee and LaSalle Bank National Association as securities administrator and master servicer, and the indenture, dated as of April 30, 2007 (the “Indenture”) among Bear Stearns Second Lien Trust 2007-1 as issuing entity, LaSalle Bank National Association as securities administrator and the Indenture Trustee, in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Assignee is made and intended not as representations, warranties, covenants, undertakings and agreements by Citibank, N.A. in its individual capacity, but is made and intended for the purpose of binding only the Assignee, (iii) under no circumstances shall Citibank, N.A. in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Assignee or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Assignee under this AAR Agreement and (iv) any recourse against the Assignee in respect of any obligations it may have under or pursuant to the terms of this AAR Agreement shall be limited solely to the assets it may hold as indenture trustee of Bear Stearns Second Lien Trust 2007-1.
Recognition of Assignee
8. From and after the date hereof, Company shall recognize Assignee as owner of the Assigned Loans, and will service the Assigned Loans for Assignee as if Assignee and Company had entered into a separate servicing agreement for the servicing of the Assigned Loans in the form of the Servicing Agreement (as modified herein), the terms of which are incorporated herein by reference. The Company acknowledges that the Assigned Loans will be part of a REMIC, and will service the Assigned Loans in accordance with the Servicing Agreement but in no event in a manner that would (i) cause any REMIC to fail to qualify as a REMIC or (ii) result in the imposition of a tax upon any REMIC (including but not limited to the tax on prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in Section 860G(d) of the Code). It is the intention of Assignor, Company and Assignee that this AAR Agreement shall be binding upon and for the benefit of the respective successors and assigns of the parties hereto. Neither Company nor Assignor shall amend or agree to amend, modify, waive, or otherwise alter any of the terms or provisions of the Servicing Agreement which amendment, modification, waiver or other alteration would in any way affect the Assigned Loans without the prior written consent of Assignee and the Note Insurer.
9. The Company shall prepare for and deliver to the Assignee, the Master Servicer and the Securities Administrator, a statement with respect to each Mortgaged Property acquired through foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Assigned Loan (“REO Property”) that has been rented showing the aggregate rental income received and all expenses incurred in connection with the management and maintenance of such REO Property at such times as is necessary to enable the Assignee (or the securities administrator, if any) to comply with the reporting requirements of the REMIC provisions of the Code. The net monthly rental income, if any, from such REO Property shall be deposited in the related collection account no later than the close of business on each determination date. The Company shall perform, or caused to be performed, the tax reporting and withholding related to foreclosures, abandonments and cancellation of indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code by preparing and filing such tax and information returns, as may be required.
Modification of Servicing Agreement
10. The Company and Assignor hereby amend the Servicing Agreement as follows:
(a)	The following definitions are added to Article I of the Servicing Agreement:
Assignee: Citibank, N.A, as indenture trustee for the holders of Bear Stearns Second Lien Trust 2007-1, Mortgage-Backed Notes, Series 2007-1.
Class X Certificateholder: Any holder of a certificate designated as a “Class X Certificate” on the face thereof.
Indenture: The indenture, dated as of April 30, 2007, among Bear Stearns Second Lien Trust 2007-1 as issuing entity, Citibank, N.A. as indenture trustee and LaSalle Bank National Association as securities administrator, relating to the Bear Stearns Second Lien Trust 2007-1, Mortgage-Backed Notes, 2007-1.
Indenture Trustee: Citibank, N.A, or its successor in interest, or any successor indenture trustee appointed as provided in the Sale and Servicing Agreement or Indenture.
Master Servicer: LaSalle Bank National Association, or its successors in interest who meet the qualifications of the Pooling and Servicing Agreement and this Agreement.
Prepayment Charge: Any prepayment premium, penalty or charge payable by a Mortgagor in connection with any Principal Prepayment on a Mortgage Loan pursuant to the terms of the related Mortgage Note.
Prepayment Period: As to any Remittance Date and each Mortgage Loan, the calendar month prior to the month in which such Remittance Date occurs.
Sale and Servicing Agreement: That certain pooling and servicing agreement, dated as of April 30, 2007, among Bear Stearns Asset Backed Securities I LLC, the Indenture Trustee, LaSalle Bank National Association. as master servicer and securities administrator, the Assignor and the Owner.
Subsequent Recoveries: As of any Remittance Date, surplus amounts held by the Servicer to cover estimated expenses (including, but not limited to, recoveries in respect of the representations and warranties made by the Servicer pursuant to the Mortgage Loan Purchase Agreement, dated as of February 1, 2005, as amended, between the Servicer and the Owner) specifically related to a Mortgage Loan that was the subject of a liquidation or final disposition of any REO Property as of the end of the prior calendar month that resulted in a realized loss.
(b)	The definition of “Business Day” is deleted in its entirety and replaced with the following:
Business Day: Any day other than: (i) a Saturday or Sunday, or (ii) a legal holiday in the States of New York, Iowa, Illinois, Minnesota or the Commonwealth of Pennsylvania or (iii) a day on which banks in the States of New York, Iowa, Illinois, Minnesota or the Commonwealth of Pennsylvania are authorized or obligated by law or executive order to be closed.
(c)	The definition of “Custodian” is deleted in its entirety and replaced with the following:
Custodians: Wells Fargo Bank, N.A., LaSalle Bank National Association and Treasury Bank, A Division of Countrywide Bank, FSB.
(d)	The definition of Qualified Depository is deleted in its entirety and replaced with the following:
Qualified Depository: A separate and segregated account established with a depository, the accounts of which are insured by the FDIC through BIF or the SAIF and the short term debt ratings of which are rated in the highest rating category by Standard & Poor's Rating Services, a division of The McGraw-Hill Companies Inc., Moody's Investors Services, Inc., or Fitch, Inc.
(e) The second paragraph of Section 4.01 of the Servicing Agreement shall be deleted in its entirety and replaced with the following:
Consistent with and in addition to the terms set forth in this Agreement, if a Mortgage Loan is in default or such default is reasonably foreseeable, the Servicer may waive, modify or vary any term of any Mortgage Loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any mortgagor, including without limitation, to (1) capitalize any amounts owing on the Mortgage Loan by adding such amount to the outstanding principal balance of the Mortgage Loan, (2) defer such amounts to a later date or the final payment date of such Mortgage Loan, (3) extend the maturity of any such Mortgage Loan, (4) amend the related Mortgage Note to reduce the related Mortgage Interest Rate with respect to any Mortgage Loan, (5) convert the Mortgage Interest Rate on any Mortgage Loan from a fixed rate to an adjustable rate or vice versa, (6) with respect to a Mortgage Loan with an initial fixed rate period followed by an adjustable rate period, extend the fixed period and reduce the adjustable rate period, and/or (7) forgive the amount of any interest and principal owed by the related Mortgagor; provided that, in the Servicer’s reasonable and prudent determination, such waiver, modification, postponement or indulgence: (A) is not materially adverse to the interests of the Owner on a present value basis using reasonable assumptions (including taking into account any estimated Realized Loss that might result absent such action); and (B) does not amend the related Mortgage Note to extend the maturity thereof later than the date of the Latest Possible Maturity Date (as such term is defined in the related pooling and servicing agreement); provided, further, with respect to any Mortgage Loan that is not in default or if default is not reasonably foreseeable, unless the Servicer has provided to the Owner a certification addressed to the Owner, based on the advice of counsel or certified public accountants that have a national reputation with respect to taxation of REMICs that a modification of such Mortgage Loan will not result in the imposition of taxes on or disqualify from REMIC status any of the REMICs and has obtained the prior written consent of the Owner, the Servicer shall not permit any modification with respect to any Mortgage Loan. Notwithstanding the foregoing, for any modification which may result in a realized loss of 20% or more of the outstanding principal balance of a Mortgage Loan, the Company shall present such proposed modification, together with any supporting documentation, to the Master Servicer for consideration and approval.
In the event of any such waiver, modification, postponement or indulgence which has been agreed to in writing by the Owner and which permits the deferral of interest or principal payments on any Mortgage Loan, the Servicer shall, on the Business Day immediately preceding the related Remittance Date in any month in which any such principal or interest payment has been deferred, deposit in the Custodial Account from its own funds, in accordance with Section 4.04, the difference between (a) such month's principal and one month's interest at the related Mortgage Loan Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b) the amount paid by the Mortgagor. The Servicer shall be entitled to reimbursement for such advances to the same extent as for all other advances pursuant to Section 4.05. Without limiting the generality of the foregoing, the Servicer shall continue, and is hereby authorized and empowered, to prepare, execute and deliver, all instruments of satisfaction or cancellation, or of partial or full release, discharge and all other comparable instruments, with respect to the Mortgage Loans and with respect to the Mortgaged Properties.
(e)	Section 4.04 of the Servicing Agreement is hereby amended by deleting the word “and” from clause (viii) of Section 4.04, deleting the period and adding “;” to the end of clause (ix) of Section 4.04 and inserting the following as clauses (x) and (xi) to Section 4.04 of the Servicing Agreement:
(x) the amount of any Prepayment Charges collected with respect to the Mortgage Loans and the amount of any Prepayment Charges paid by the Servicer in connection with the waiver of a Prepayment Charge in a manner that is not permitted under this Agreement; and
(xi) all Subsequent Recoveries with respect to any Mortgage Loan, other than proceeds to be applied to the restoration or repair of the Mortgage Property or released to the Mortgagor in accordance with the Servicer’s normal servicing procedures.
(f)	Section 4.05 of the Servicing Agreement is hereby amended by deleting the following from the end of clause (iii) of Section 4.05 in its entirety:
provided, however, that prior to the Servicer receiving reimbursements from the Owner pursuant to this clause (iii), the Servicer shall submit a claim for reimbursement in the form of Exhibit I hereto to the Owner seeking approval within ninety (90) days of final liquidation of the Mortgage Loans (except that the Servicer shall not submit more than four (4) claims for reimbursement within such ninety (90) day period). The Owner shall provide such approval or denial to the Servicer no later than thirty (30) days after receipt of such claim; provided, however, such claim must be complete with all supporting documentation;
(g)	Section 5.02 of the Servicing Agreement is hereby amended by deleting the period and adding “;” to the end of clause (xiii) of Section 5.02 and inserting the following clause (xiv) to Section 5.02 of the Servicing Agreement:
(viv) each Mortgage Loan that has been charged off and released from the trust fund pursuant and transferred to the Class X Certificateholder pursuant to Section 5.03 of this Agreement.
(h)	Section 5.03 of the Servicing Agreement is hereby amended by inserting as the second and third pagraphs in the section the following:
The Servicer shall discontinue making advances with respect to any Mortgage Loan that becomes 60 days delinquent. In addition, subject to Section 4.03 of this Agreement, the Servicer must charge off a Mortgage Loan at the time such Mortgage Loan, as applicable, becomes 180 days delinquent unless the Servicer reasonably believes that it may be able to obtain a net recovery through foreclosure proceedings or other conversion of the related Mortgage Loan. Once a Mortgage Loan is charged off, the Servicer shall not be entitled to any additional Servicing Fee for such Mortgage Loan, except to the extent of any unpaid Servicing Fees and expenses which shall be reimbursable from any recoveries on such Mortgage Loan, and the Mortgage Loan shall be treated as a liquidated loan giving rise to a realized loss. If the Servicer determines that a significant net recovery is possible through foreclosure proceedings or other disposition of the related Mortgage Loan that becomes 60 days delinquent, the Servicer may continue making advances on such Mortgage Loan. To the extent the Servicer determines that a proposed Advance would not be a Nonrecoverable Advance and in its sole discretion reinstates and subsequently makes additional Advances for such Mortgage Loan, such Advances shall be reimbursable from any Subsequent Recoveries or as otherwise provided for in this Agreement.
Unless Subsequent Recoveries are anticipated, as applicable, on a particular Mortgage Loan that is charged off as described in the preceding paragraph, such charged off Mortgage Loan will be released from the trust fund, and will be transferred to the Class X Certificateholder. If any Subsequent Recoveries are anticipated on such charged off Mortgage Loans, the release of such Mortgage Loan from the trust fund will be delayed until the distribution date after receipt of such Subsequent Recoveries. After the release of any charged off Mortgage Loan, the Class X Certificateholders will be entitled to any amounts subsequently received in respect of any such released Mortgage Loans, subject to any fees or expenses owed to the Master Servicer. Such Class X Certificateholder may designate any servicer to service any such released Mortgage Loan and the Class X Certificateholder may sell any such released Mortgage Loan to a third party. To the extent the servicing of such released Mortgage Loan is not transferred to the Servicer, the servicing of such released Mortgage Loan and the fees therefor shall be governed by this Agreement.
(i)	The following is added as Section 6.11 of the Servicing Agreement:
Section 6.11 No Waiver of Prepayment Charges
The Servicer may waive the collection of any otherwise applicable Prepayment Charge or reduce the amount thereof actually collected, but only if: (i) the enforceability thereof will have been limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally, (ii) the enforcement thereof is illegal, or any local, state or federal agency has threatened legal action if the Prepayment Charge is enforced, (iii) the mortgage debt has been accelerated in connection with a foreclosure or other involuntary payment or (iv) such waiver is standard and customary in servicing similar Mortgage Loans and relates to a default or a reasonably foreseeable default and would, in the reasonable judgment of the Servicer, maximize recovery of total proceeds taking into account the value of such Prepayment Charge and the related Mortgage Loan. If a Prepayment Charge is waived, but does not meet the standards described above, then the Servicer is required to pay the amount of such waived Prepayment Charge by remitting such amount to the Master Servicer by the Remittance Date.
(j)	Exhibit G of the Servicing Agreement is deleted in its entirety and replaced with the following:
EXHIBIT G
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
AND RELATED ACCOUNTANT’S ATTESTATION
The assessment of compliance to be delivered by [the Company] [Name of Subservicer] shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria”:
*Servicing Criteria*		*Applicable* *Servicing* *Criteria*
Reference	Criteria
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	x
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.	x
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.	x
	Cash Collection and Administration
1122(d)(2)(i)	Payments on mortgage loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.	x
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	x
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.	x
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	x
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	x
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.	x
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.	x
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of mortgage loans serviced by the Servicer.	x (with respect to A, B and D only)
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	x
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.	x
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	x
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on mortgage loans is maintained as required by the transaction agreements or related mortgage loan documents.	x
1122(d)(4)(ii)	Mortgage loan and related documents are safeguarded as required by the transaction agreements	x
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	x
1122(d)(4)(iv)	Payments on mortgage loans, including any payoffs, made in accordance with the related mortgage loan documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related mortgage loan documents.	x
1122(d)(4)(v)	The Servicer’s records regarding the mortgage loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	x
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor's mortgage loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.	x
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	x
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a mortgage loan is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent mortgage loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	x
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for mortgage loans with variable rates are computed based on the related mortgage loan documents.	x
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s mortgage loan documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable mortgage loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related mortgage loans, or such other number of days specified in the transaction agreements.	x
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	x
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.	x
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.	x
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.	x
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.
*The term “investor under this Exhibit G shall mean “master servicer.”

	[NAME OF COMPANY] [NAME OF SUBSERVICER]

	Date:


	By:
	Name:
	Title:
(k)	Exhibit H in the Servicing Agreement shall be modified by deleting the words “Wells Fargo Bank”, “WFB” and “Wells Fargo Bank, N.A.” and replacing them with “LaSalle Bank National Association”, where applicable.
(l)	Exhibit I of the Servicing Agreement is deleted in its entirety and replaced with the following:
REPORTING DATA FOR REALIZED LOSSES AND GAINS
2. The numbers on the 332 form correspond with the numbers listed below.
Liquidation and Acquisition Expenses:
The Actual Unpaid Principal Balance of the Mortgage Loan. For documentation, an Amortization Schedule from date of default through liquidation breaking out the net interest and servicing fees advanced is required.
The Total Interest Due less the aggregate amount of servicing fee that would have been earned if all delinquent payments had been made as agreed. For documentation, an Amortization Schedule from date of default through liquidation breaking out the net interest and servicing fees advanced is required.
Accrued Servicing Fees based upon the Scheduled Principal Balance of the Mortgage Loan as calculated on a monthly basis. For documentation, an Amortization Schedule from date of default through liquidation breaking out the net interest and servicing fees advanced is required.
4-12.
Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form - breakdown required showing period
of coverage, base tax, interest, penalty. Advances prior to default require evidence of servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and WFB’s approved Officer Certificate
* Unusual or extraordinary items may require further documentation.
13.
The total of lines 1 through 12.
3. Credits:
14-21.
Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3^rd Party Sale, bid instructions and Escrow Agent / Attorney
Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22.
The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial proceeds and line (18b) for Part B/Supplemental proceeds.
Total Realized Loss (or Amount of Any Gain)
23.
The total derived from subtracting line 22 from 13. If the amount represents a realized gain, show the amount in parenthesis ( ).
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address:_____________________
Servicer Loan No.
Servicer Name
Servicer Address
LA SALLE BANK NATIONAL ASSOCIATION Loan No.___________________________
Borrower's Name:
_________________________________________________________
Property Address: _________________________________________________________
Liquidation Type: REO Sale 3^rd Party Sale Short Sale Charge Off
Was this loan granted a Bankruptcy deficiency or cramdown Yes No
If “Yes”, provide deficiency or cramdown amount _______________________________
Liquidation and Acquisition Expenses:
(1)	Actual Unpaid Principal Balance of Mortgage Loan		$	(1)
(2)	Interest accrued at Net Rate			(2)
(3)	Accrued Servicing Fees			(3)
(4)	Attorney's Fees			(4)
(5)	Taxes (see page 2)			(5)
(6)	Property Maintenance			(6)
(7)	MI/Hazard Insurance Premiums (see page 2)			(7)
(8)	Utility Expenses			(8)
(9)	Appraisal/BPO			(9)
(10)	Property Inspections			(10)
(11)	FC Costs/Other Legal Expenses			(11)
(12)	Other (itemize)			(12)
		Cash for Keys		(12)
		HOA/Condo Fees		(12)
				(12)

		Total Expenses	$	(13)
Credits:
(14)	Escrow Balance		$	(14)
(15)	HIP Refund			(15)
(16)	Rental Receipts			(16)
(17)	Hazard Loss Proceeds			(17)
(18)	Primary Mortgage Insurance / Gov’t Insurance			(18a)
HUD Part A

HUD Part B				(18b)
(19)	Pool Insurance Proceeds			(19)
(20)	Proceeds from Sale of Acquired Property			(20)
(21)	Other (itemize)			(21)
				(21)

	Total Credits		$	(22)
Total Realized Loss (or Amount of Gain)			$	(23)
Escrow Disbursement Detail
Type (Tax /Ins.)	Date Paid	Period of Coverage	Total Paid	Base Amount	Penalties	Interest
Miscellaneous
11. All demands, notices and communications related to the Assigned Loans, the Servicing Agreement and this AAR Agreement shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by registered mail, postage prepaid, as follows:
a. In the case of Company,
GMAC Mortgage, LLC
500 Enterprise Road
Attention: Mr. Frank Ruhl
Telecopier No.: (215) 682-3396
b. In the case of Assignor,
EMC Mortgage Corporation
2780 Lake Vista Drive
Lewisville, Texas 75067
Attention: General Counsel
Telecopier No.: (469) 759-4714
c. In the case of Assignee,
Citibank, N.A., as Indenture Trustee
388 Greenwich Street, 14^th Floor
New York, New York 10013
Attention: BSSLT 2007-1
Telecopier No.: (212) 816-5527
d . In the case of the Note Insurer:
Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention: Risk Management- Consumer Asset-Backed Securities
Telecopier No.: (212)668-0340
12. The Company hereby acknowledges that LaSalle Bank National Association (the “Master Servicer”) has been appointed as the master servicer of the Assigned Loans pursuant to the Sale and Servicing Agreement, dated as of April 30, 2007, among the Assignor, the Assignee, BSABS I, LaSalle Bank National Association as securities administrator and the Master Servicer, and therefor has the right to enforce all obligations of the Company, as they relate to the Assigned Loans, under the Servicing Agreement. Such right will include, without limitation, the right to terminate the Company under the Servicing Agreement upon the occurrence of an event of default thereunder, the right to receive all remittances required to be made by the Company under the Servicing Agreement, the right to receive all monthly reports and other data required to be delivered by the Company under the Servicing Agreement, the right to examine the books and records of the Company, indemnification rights, and the right to exercise certain rights of consent and approval relating to actions taken by the Company. The Company shall make all distributions under the Servicing Agreement, as they relate to the Assigned Loans, to the Master Servicer by wire transfer of immediately available funds to:
LaSalle Bank National Association
ABA# 071000505
Account # 900328.1
Attn: Renee Dettman - BSSLT 2007-1
and the Company shall deliver all reports required to be delivered under the Servicing Agreement, as they relate to the Assigned Loans, to the Assignee at the address set forth in Section 10 herein and to the Master Servicer at:
LaSalle Bank National Association
135 S. LaSalle St., Suite 1511
Chicago, IL 60603
Attention: Global Securities and Trust Services Group- BSSLT 2007-1
13. THIS AAR AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
14. No term or provision of this AAR Agreement may be waived or modified unless such waiver or modification is in writing and signed by the party against whom such waiver or modification is sought to be enforced and is with the prior written consent of the Note Insurer (which consent shall not be unreasonably withheld) if any such waiver or modification shall adversely affect the interests of the Note Insurer.
15. This AAR Agreement shall inure to the benefit of the successors and assigns of the parties hereto and the Note Insurer (as a third party beneficiary hereof). Any entity into which Assignor, Assignee or Company may be merged or consolidated shall, without the requirement for any further writing, be deemed Assignor, Assignee or Company, respectively, hereunder.
16. This AAR Agreement shall survive the conveyance of the Assigned Loans, the assignment of the Servicing Agreement to the extent of the Assigned Loans by Assignor to Assignee and the termination of the Servicing Agreement and the Purchase Agreements.
17. This AAR Agreement may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original and all such counterparts shall constitute one and the same instrument.
18. In the event that any provision of this AAR Agreement conflicts with any provision of the Servicing Agreement with respect to the Assigned Loans, the terms of this AAR Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
EMC MORTAGE CORPORATION, the Assignor	CITIBANK, N.A, not individually but solely as Indenture Trustee for the holders of Bear Stearns Second Lien Trust 2007-1, Mortgage-Backed Notes, Series 2007-1,
	the Assignee

By:_____________________________	By: _____________________________


Name:___________________________	Name:___________________________

Title:____________________________	Title:____________________________


GMAC MORTGAGE, LLC, the Company

By:_____________________________

Name:___________________________

Title: __________________________
Acknowledged and Agreed
LASALLE BANK NATIONAL ASSOCIATION the Master Servicer	BEAR STEARNS ASSET BACKED SECURITIES I LLC

By: ______________________________	By: ________________________
Name:___________________________	Name: Joseph T. Jurkowski, Jr.
Title:____________________________	Title: Vice President
ATTACHMENT 1
ASSIGNED LOANS
[Provided Upon Request]
ATTACHMENT 2
SERVICING AGREEMENT
EXHIBIT C-2
FORM OF GMACM HELOC SERVICING AGREEMENT AND ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
EMC MORTGAGE CORPORATION
Owner
and
GMAC MORTGAGE CORPORATION
Servicer
SERVICING AGREEMENT
Dated as of August 1, 2005
EXHIBITS
Exhibit A	Revolving Credit Loan Schedule

Exhibit B	Custodial Account Letter Agreement

Exhibit C	Escrow Account Letter Agreement

Exhibit D	Form of Request for Release

Exhibit E	Loan Level Format for Tape Input

Exhibit F	Reporting Data for Defaulted Loans

Exhibit G	Wiring Instructions
THIS IS A SERVICING AGREEMENT, dated as of August 1, 2005, and is executed between EMC Mortgage Corporation (the "Owner") and GMAC Mortgage Corporation (the "Servicer").
W I T N E S S E T H :
WHEREAS, the Owner is the owner of the Revolving Credit Loans;
WHEREAS, the Owner and the Servicer wish to prescribe the management, servicing and control of the Revolving Credit Loans;
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meaning specified in this Article:
Accepted Servicing Practices: With respect to any Revolving Credit Loan, those mortgage servicing practices (including collection procedures) that are in accordance with the Fannie Mae Guide.
Additional Balance: With respect to any Revolving Credit Loan, any Draw made by the related Mortgagor pursuant to the related Loan Agreement after the Cut-off Date.
Agreement: This Servicing Agreement including all exhibits hereto, amendments hereof and supplements hereto.
Appraised Value: The value set forth in an appraisal made in connection with the origination of the related Revolving Credit Loan as the value of the related Mortgaged Property.
BIF: The Bank Insurance Fund, or any successor thereto.
Cancellation Fee: With respect to any Revolving Credit Loan, a fee required to be paid pursuant to the related Loan Agreement in connection with an early termination of such Revolving Credit Loan.
Charged-Off Revolving Credit Loan: A Revolving Credit Loan with a Stated Principal Balance that has been written down on the Servicer’s servicing system in accordance with its policies and procedures and any Revolving Credit Loan that is more than 180 days past due.
Code: The Internal Revenue Code of 1986, as it may be amended from time to time, or any successor statute thereto, and applicable U.S. Department of the Treasury regulations issued pursuant thereto.
Collection Period: The period commencing on the 11^th day of the month immediately preceding the month in which such Remittance Date occurs and ending on the 10th day of the month in which such Remittance Date occurs, or, in the case of the first Collection Period, the period commencing on August 26, 2005 and ending on September 10, 2005.
Combined Loan to Value Ratio or CLTV: With respect to any second lien Revolving Credit Loan, the sum of the Credit Limit of such Revolving Credit Loan and the outstanding principal balance of any related First Lien, divided by the lesser of the Appraised Value of the Mortgaged Property as of the origination date or the purchase price of the Mortgaged Property.
Credit Limit: With respect to a Revolving Credit Loan, the maximum principal amount which may be advanced to a Mortgagor under the terms of the related Loan Agreement.
Custodian: Wells Fargo Bank, N.A., or such other custodian as Owner shall designate.
Cut-off Date: August 23, 2005.
Draw: With respect to any Revolving Credit Loan, a borrowing by the Mortgagor under the related Loan Agreement.
Draw Period: With respect to each Revolving Credit Loan, the period commencing after the date of origination of such Revolving Credit Loan, during which the related Mortgagor is permitted to make Draws. The Draw Period shall be specified in the Revolving Credit Loan Schedule.
Due Date: Each day on which payments of principal and interest are required to be paid in accordance with the terms of the related Mortgage Note, exclusive of any days of grace.
Effective Date: August 26, 2005.
Escrow Payments: With respect to any Revolving Credit Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Event of Default: Any one of the conditions or circumstances enumerated in Section 9.01.
Fannie Mae: Fannie Mae, or any successor thereto.
Fannie Mae Guide: The Fannie Mae Selling Guide and the Fannie Mae Servicing Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer pursuant to Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended from time to time.
First Lien: With respect to any second lien Revolving Credit Loan, the mortgage loan relating to the corresponding Mortgaged Property having a first priority lien.
Freddie Mac: Freddie Mac, or any successor thereto.
Freddie Mac Guide: The Freddie Mac Selling Guide and the Freddie Mac Servicing Guide and all amendments or additions thereto.
GAAP: Generally accepted accounting procedures, consistently applied.
HUD: The United States Department of Housing and Urban Development or any successor.
Index: With respect to any Revolving Credit Loan, the Prime Rate.
Insurance Proceeds: With respect to each Revolving Credit Loan, proceeds of insurance policies insuring the Revolving Credit Loan or the related Mortgaged Property.
Interim Servicing Period: With respect to each Revolving Credit Loan subject to this Agreement, the period commencing on the Effective Date and ending on the earlier of (i) the effective date of a Whole Loan Transfer or Pass-Through Transfer or (ii) the date on which the Servicer’s obligations under this Agreement are terminated pursuant to Section 10.01 hereof.
Liquidation Proceeds: Cash received in connection with the liquidation of a defaulted Revolving Credit Loan, whether through the sale or assignment of such Revolving Credit Loan, trustee's sale, foreclosure sale or otherwise, other than amounts received following the acquisition of an REO Property pursuant to Section 4.13.
Loan Agreement: With respect to any Revolving Credit Loan, the credit line account agreement executed by the related Mortgagor and any amendment or modification thereof.
Margin: With respect to each Revolving Credit Loan, the spread over the applicable Index, as specified in the related Mortgage Note.
Monthly Payment: With respect to any Revolving Credit Loan, the minimum amount required to be paid by the related Mortgagor in that month.
Mortgage: The mortgage, deed of trust or other instrument securing a Mortgage Note which creates a first or second lien on an unsubordinated estate in fee simple in real property securing the Mortgage Note.
Mortgage Interest Rate: The annual rate at which interest accrues on any Revolving Credit Loan in accordance with the provisions of the related Mortgage Note.
Mortgage Note: With respect to each Revolving Credit Loan, the Loan Agreement.
Mortgaged Property: The underlying real property securing repayment of a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
OCC: Office of the Comptroller of the Currency, its successors and assigns.
Officer's Certificate: A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President, a Senior Vice President or a Vice President or by the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant Secretaries of the Servicer, and delivered to the Owner as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee of the party on behalf of whom the opinion is being given, reasonably acceptable to the Owner.
OTS: Office of Thrift Supervision, its successors and assigns.
Owner: EMC Mortgage Corporation.
Pass-Through Transfer: The sale or transfer of same or all of the Revolving Credit Loans to a trust as part of a publicly issued or privately placed, rated or unrated Mortgage pass-through transaction.
Permitted Investments: Any one or more of the following obligations or securities:
(i) direct obligations of, and obligations fully guaranteed by the United States of America or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America; provided that obligations of Freddie Mac or Fannie Mae shall be Permitted Investments only if, at the time of investment, they are rated in one of the two highest rating categories by Standard & Poor's Rating Services, a division of The McGraw-Hill Companies Inc., Moody's Investors Service, Inc. and Fitch Ratings;
(ii) (a) demand or time deposits, federal funds or bankers' acceptances issued by any depository institution or trust company incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal and/or state banking authorities, provided that the commercial paper and/or the short-term deposit rating and/or the long-term unsecured debt obligations or deposits of such depository institution or trust company at the time of such investment or contractual commitment providing for such investment are rated in one of the two highest rating categories by Standard & Poor's Rating Services, a division of The McGraw-Hill Companies Inc., Moody's Investors Service, Inc. and Fitch Ratings and (b) any other demand or time deposit or certificate of deposit that is fully insured by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to (a) any security described in clause (i) above or (b) any other security issued or guaranteed by an agency or instrumentality of the United States of America, the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (ii)(a) above;
(iv) securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States of America or any state thereof that are rated in one of the two highest rating categories by Standard & Poor's Rating Services, a division of The McGraw-Hill Companies Inc., Moody's Investors Service, Inc. and Fitch Ratings at the time of such investment or contractual commitment providing for such investment; provided, however, that securities issued by any particular corporation will not be Permitted Investments to the extent that investments therein will cause the then outstanding principal amount of securities issued by such corporation and held as Permitted Investments to exceed 10% of the aggregate outstanding principal balances and amounts of all the Permitted Investments;
(v) commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the date of issuance thereof) which are rated in one of the two highest rating categories by Standard & Poor's Rating Services, a division of The McGraw-Hill Companies Inc., Moody's Investors Service, Inc. and Fitch Ratings at the time of such investment;
(vii) any money market funds the collateral of which consists of obligations fully guaranteed by the United States of America or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America (which may include repurchase obligations secured by collateral described in clause (i)) and other securities and which money market funds are rated in one of the two highest rating categories by Standard & Poor's Rating Services, a division of The McGraw-Hill Companies Inc., Moody's Investors Service, Inc. and Fitch Ratings;
provided, however, that no instrument or security shall be a Permitted Investment if such instrument or security evidences a right to receive only interest payments with respect to the obligations underlying such instrument or if such security provides for payment of both principal and interest with a yield to maturity in excess of 120% of the yield to maturity at par.
Prime Rate: The prime rate of U.S. money center banks as published from time to time in The Wall Street Journal.
Principal Prepayment: Any payment or other recovery of principal on a Revolving Credit Loan, full or partial, which is received in advance of its scheduled Due Date, including any prepayment penalty or premium thereon and which is not accompanied by an amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.
Qualified Appraiser: An appraiser, duly appointed by the Servicer, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Revolving Credit Loan, which appraiser and the appraisal made by such appraiser both satisfy the requirements of Title XI of FIRREA and the regulations promulgated thereunder, all as in effect on the date the Revolving Credit Loan was originated.
Rating Agencies: Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc., Moody’s Investors Service, Inc. or, in the event that some or all ownership of the Revolving Credit Loans is evidenced by mortgage backed securities, the nationally recognized rating agencies issuing ratings with respect to such securities, if any.
Recoveries: With respect to a Charged Off Revolving Credit Loan, the proceeds received by the Servicer in connection with such Charged Off Revolving Credit Loan minus related Servicing Advances.
REMIC: A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.
Remittance Date: The 18th day of any month, or if such 18th day is not a Business Day, the first Business Day immediately preceding such 18th day.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: Amounts received by the Servicer in connection with a related REO Disposition.
REO Property: A Mortgaged Property acquired by the Servicer on behalf of the Owner as described in Section 4.13.
Revolving Credit Loan: An individual Revolving Credit Loan which is the subject of this Agreement, including any Additional Balances with respect thereto, described herein and as further identified on the Revolving Credit Loan Schedule, which Revolving Credit Loan includes without limitation the Revolving Credit Loan Documents, the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds, and all other rights, benefits, proceeds and obligations arising from or in connection with such Revolving Credit Loan.
Revolving Credit Loan Documents: The original revolving credit loan legal documents held by the Owner or the Custodian.
Revolving Credit Loan Remittance Rate: With respect to each Revolving Credit Loan, the annual rate of interest remitted to the Owner, which shall be equal to the related Mortgage Interest Rate minus the Servicing Fee Rate.
Revolving Credit Loan Schedule: The schedule of Revolving Credit Loans attached hereto as Exhibit A, such schedule being acceptable to the Owner and the Servicer.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
Servicer: GMAC Mortgage Corporation, or any of its successors in interest or any successor under this Agreement appointed as herein provided.
Servicing Advances: All customary, reasonable and necessary "out of pocket" costs and expenses (including reasonable attorneys' fees and disbursements) incurred prior to, on and subsequent to the Effective Date in the performance by the Servicer of its servicing obligations relating to each Revolving Credit Loan, including, but not limited to, the cost of (a) the preservation, restoration and protection of the Mortgaged Property, (b) any enforcement, administrative or judicial proceedings, or any legal work or advice specifically related to servicing the Revolving Credit Loans, including but not limited to, foreclosures, bankruptcies, condemnations, drug seizures, elections, foreclosures by subordinate or superior lienholders, and other legal actions incidental to the servicing of the Revolving Credit Loans (provided that such expenses are reasonable and that the Servicer specifies the Revolving Credit Loan(s) to which such expenses relate), (c) the management and liquidation of the Mortgaged Property if the Mortgaged Property is acquired in full or partial satisfaction of the Mortgage, (d) taxes, assessments, water rates, sewer rates and other charges which are or may become a lien upon the Mortgaged Property, and fire and hazard insurance coverage and (e) compliance with the obligations under Section 4.08.
Servicing Fee: With respect to each Revolving Credit Loan, the amount of the annual servicing fee the Owner shall pay to the Servicer, which shall, for a period of one full month, be equal to one--twelfth of the product of (a) the applicable Servicing Fee Rate and (b) the outstanding principal balance of the Revolving Credit Loan. Such fee shall be payable monthly, computed on the basis of the same principal amount and period respecting which any related interest payment on a Revolving Credit Loan is computed. If the Interim Servicing Period includes any partial month, the Servicing Fee for such month shall be pro rated at a per diem rate based on the actual number of days such Revolving Credit Loan was serviced by the Servicer during such partial month. The obligation of the Owner to pay the Servicing Fee is limited to, and the Servicing Fee is payable solely from, the interest portion (not including recoveries of interest from Liquidation Proceeds or otherwise) of such Monthly Payment collected by the Servicer or as otherwise provided under Section 4.05.
Servicing Fee Rate: The Servicing Fee Rate shall be a rate per annum equal to 0.50%.
Servicing File: The documents, records and other items pertaining to a particular Revolving Credit Loan and any additional documents relating to such Revolving Credit Loan as are in, or as may from time to time come into, the Servicer's possession.
Servicing Officer: Any officer of the Servicer involved in, or responsible for, the administration and servicing of the Revolving Credit Loans whose name appears on a list of servicing officers furnished by the Servicer to the Owner upon request, as such list may from time to time be amended.
Stated Principal Balance: As to each Revolving Credit Loan as of any date of determination, (i) the principal balance of such Revolving Credit Loan after giving effect to payments of principal due and received, plus (ii) any Additional Balances in respect of such Revolving Credit Loan, minus (iii) all amounts previously distributed to the Owner with respect to the Revolving Credit Loan representing Principal Prepayments.
Whole Loan Transfer: The sale or transfer of some or all of the ownership interest in the Revolving Credit Loans by the Owner to one or more third parties in whole loan or participation format, which third party may be Fannie Mae or Freddie Mac.
ARTICLE II
SERVICING OF REVOLVING CREDIT LOANS; POSSESSION OF SERVICING FILES; BOOKS AND RECORDS; DELIVERY OF REVOLVING CREDIT LOAN DOCUMENTS
Section 2.01. Servicing of Revolving Credit Loans.
From and after the Effective Date, the Servicer does hereby agree to service the Revolving Credit Loans in accordance with the terms of this Agreement. The rights of the Owner to receive payments with respect to the Revolving Credit Loans shall be as set forth in this Agreement. The obligations under the Loan Agreements to fund the Draws to the Mortgagors shall be performed by the Servicer and reimbursed by the Owner as provided in this Agreement.
Section 2.02. Maintenance of Servicing Files.
The Servicer shall maintain a Servicing File consisting of all documents necessary to service the Revolving Credit Loans. The possession of each Servicing File by the Servicer is for the sole purpose of servicing the Revolving Credit Loan, and such retention and possession by the Servicer is in a custodial capacity only. The Servicer acknowledges that the ownership of each Revolving Credit Loan, including the Note, the Mortgage, all other Revolving Credit Loan Documents and all rights, benefits, proceeds and obligations arising therefrom or in connection therewith, has been vested in the Owner. All rights arising out of the Revolving Credit Loans including, but not limited to, all funds received on or in connection with the Revolving Credit Loans and all records or documents with respect to the Revolving Credit Loans prepared by or which come into the possession of the Servicer shall be received and held by the Servicer in trust for the exclusive benefit of the Owner as the owner of the related Revolving Credit Loans. Any portion of the related Servicing Files retained by the Servicer shall be appropriately identified in the Servicer's computer system to clearly reflect the ownership of the related Revolving Credit Loans by the Owner. The Servicer shall release its custody of the contents of the related Servicing Files only in accordance with written instructions of the Owner, except when such release is required as incidental to the Servicer's servicing of the Revolving Credit Loans, such written instructions shall not be required.
Section 2.03. Books and Records.
The Servicer shall be responsible for maintaining, and shall maintain, a complete set of books and records for the Revolving Credit Loans which shall be appropriately identified in the Servicer's computer system to clearly reflect the ownership of the Revolving Credit Loan by the Owner. In particular, the Servicer shall maintain in its possession, available for inspection by the Owner, or its designee and shall deliver to the Owner upon demand, reasonable evidence of Servicer’s compliance, and, to the extent provided by the Owner or its designee, reasonable evidence of any prior servicer’s or originator’s compliance with all federal, state and local laws, rules and regulations, and requirements of Fannie Mae or Freddie Mac, as applicable, including but not limited to documentation as to the method used in determining the applicability of the provisions of the Flood Disaster Protection Act of 1973, as amended, to the Mortgaged Property, documentation evidencing insurance coverage and eligibility of any condominium project for approval by Fannie Mae and periodic inspection reports as required by Section 4.13. To the extent that original documents are not required for purposes of realization of Liquidation Proceeds or Insurance Proceeds, documents maintained by the Servicer may be in the form of microfilm or microfiche or such other reliable means of recreating original documents, including but not limited to, optical imagery techniques so long as the Servicer complies with the requirements of the Fannie Mae Guide.
The Servicer shall maintain with respect to each Revolving Credit Loan and shall make available for inspection by any Owner or its designee the related Servicing File (or copies thereof) upon reasonable request during the time the Owner retains ownership of a Revolving Credit Loan and thereafter in accordance with applicable laws and regulations.
Section 2.04. Transfer of Revolving Credit Loans.
The Servicer shall keep at its servicing office books and records in which, subject to such reasonable regulations as it may prescribe from time to time, the Servicer shall note transfers of Revolving Credit Loans. No transfer of a Revolving Credit Loan may be made unless such transfer is in compliance with the terms hereof. For the purposes of this Agreement, the Servicer shall be under no obligation to deal with any person with respect to this Agreement or any Revolving Credit Loan unless a notice of the transfer of such Revolving Credit Loan has been delivered to the Servicer in accordance with this Section 2.04. The Owner may, subject to the terms of this Agreement, sell and transfer one or more of the Revolving Credit Loans in accordance with Sections 10.02 and 11.12, provided, however, that the transferee will not be deemed to be an Owner hereunder binding upon the Servicer unless such transferee shall agree in writing to be bound by the terms of this Agreement and an assignment and assumption of this Agreement reasonably acceptable to the Servicer. The Owner also shall advise the Servicer in writing of the transfer. Upon receipt of notice of the permitted transfer, the Servicer shall mark its books and records to reflect the ownership of the Revolving Credit Loans of such assignee, and shall release the previous Owner from its obligations hereunder with respect to the Revolving Credit Loans sold or transferred.
Section 2.05. Delivery of Revolving Credit Loan Documents.
The Servicer shall forward to the Owner or the Custodian on behalf of the Owner original documents evidencing an assumption, modification, consolidation or extension of any Revolving Credit Loan entered into in accordance with Section 4.01 or 6.01 promptly after their execution; provided, however, that the Servicer shall provide the Owner or the Custodian on behalf of the Owner with a certified true copy of any such document submitted for recordation promptly after its execution, and shall provide the original of any document submitted for recordation or a copy of such document certified by the appropriate public recording office to be a true and complete copy of the original within 180 days of its execution. If delivery is not completed within 180 days solely due to delays in making such delivery by reason of the fact that such documents shall not have been returned by the appropriate recording office, the Servicer shall continue to use its best efforts to effect delivery as soon as possible thereafter.
From time to time the Servicer may have a need for Revolving Credit Loan Documents to be released by the Owner or the Custodian. If the Servicer shall require any of the Revolving Credit Loan Documents, the Servicer shall notify the Owner or the Custodian in writing of such request in the form of the request for release attached hereto as Exhibit D. The Owner or the Custodian shall deliver to the Servicer promptly, and in no event later than five (5) Business Days, any requested Revolving Credit Loan Document previously delivered to the Owner or the Custodian, provided that such documentation is promptly returned to the Owner or the Custodian when the Servicer no longer requires possession of the document, and provided that during the time that any such documentation is held by the Servicer, such possession is in trust for the benefit of the Owner.
Section 2.06 Quality Control Procedures.
The Servicer must have an internal quality control program that must be capable of evaluating and monitoring the overall quality of its servicing activities. The purpose of the program is to ensure that the Revolving Credit Loans are serviced in accordance with Accepted Servicing Practices; guard against dishonest, fraudulent, or negligent acts; and guard against errors and omissions by officers, employees, or other authorized persons.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of the Servicer.
The Servicer represents, warrants and covenants to the Owner that as of the Effective Date or as of such date specifically provided herein:
(a) The Servicer is a validly existing corporation in good standing under the laws of the State of its organization and is qualified to transact business in, is in good standing under the laws of, and possesses all licenses necessary for the conduct of its business in, each state in which any Mortgaged Property is located or is otherwise exempt or not required under applicable law to effect such qualification or license and no demand for such qualification or license has been made upon the Servicer by any such state, and in any event the Servicer is in compliance with the laws of each such State to the extent necessary to ensure the enforceability of each Revolving Credit Loan and the servicing of the Revolving Credit Loans in accordance with the terms of this Agreement;
(c) None of the execution and delivery of this Agreement, the consummation of the transactions contemplated thereby and hereby, or the fulfillment of or compliance with the terms and conditions of this Agreement will conflict with any of the terms, conditions or provisions of the Servicer's articles of incorporation or by-laws or materially conflict with or result in a breach of any of the terms, conditions or provisions of any legal restriction or any agreement or instrument to which the Servicer is now a party or by which it is bound, or constitute a default or result in an acceleration under any of the foregoing, or result in the material violation of any law, rule, regulation, order, judgment or decree to which the Servicer or its property is subject;
(d) There is no litigation pending or, to the Servicer’s knowledge, threatened with respect to the Servicer which is reasonably likely to have a material adverse effect on the execution, delivery or enforceability of this Agreement, or which is reasonably likely to have a material adverse effect on the financial condition of the Servicer;
(f) The Servicer is an approved seller/servicer of residential mortgage loans for Fannie Mae and Freddie Mac. The Servicer is in good standing to service mortgage loans for Fannie Mae and Freddie Mac and no event has occurred which would make the Servicer unable to comply with eligibility requirements or which would require notification to either Fannie Mae or Freddie Mac; and
(g) No written statement, report or other document furnished or to be furnished pursuant to the Agreement contains or will contain any statement that is or will be inaccurate or misleading in any material respect or omits to state a material fact required to be stated therein or necessary to make the information and statements therein not misleading.
ARTICLE IV
ADMINISTRATION AND SERVICING OF REVOLVING CREDIT LOANS
Section 4.01. Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service and administer the Revolving Credit Loans in accordance with this Agreement and with Accepted Servicing Practices (giving due consideration to the Owner's reliance on the Servicer), and shall have full power and authority, acting alone, to do or cause to be done any and all things in connection with such servicing and administration which the Servicer may deem necessary or desirable and consistent with the terms of this Agreement and with Accepted Servicing Practices and shall exercise the same care that it customarily employs for its own account. Except as set forth in this Agreement, the Servicer shall service the Revolving Credit Loans in accordance with Accepted Servicing Practices in compliance with the servicing provisions of the Fannie Mae Guide, which include, but are not limited to, provisions regarding the liquidation of Revolving Credit Loans, the collection of Revolving Credit Loan payments, the payment of taxes, insurance and other charges, the maintenance of hazard insurance with a Qualified Insurer, the maintenance of fidelity bond and errors and omissions insurance, inspections, the restoration of Mortgaged Property, insurance claims, and title insurance, management of REO Property, permitted withdrawals with respect to REO Property, liquidation reports, and reports of foreclosures and abandonments of Mortgaged Property, the transfer of Mortgaged Property, the release of Revolving Credit Loan Documents, annual statements, and examination of records and facilities. In the event of any conflict, inconsistency or discrepancy between any of the servicing provisions of this Agreement and any of the servicing provisions of the Fannie Mae Guide, the provisions of this Agreement shall control and be binding upon the Owner and the Servicer. The Owner shall, upon reasonable request, deliver powers-of-attorney to the Servicer sufficient to allow the Servicer as servicer to execute all documentation requiring execution on behalf of Owner with respect to the servicing of the Revolving Credit Loans, including satisfactions, partial releases, modifications and foreclosure documentation or, in the alternative, shall as promptly as reasonably possible, execute and return such documentation to the Servicer.
Consistent with the terms of this Agreement, the Servicer may waive, modify or vary any term of any Revolving Credit Loan, including permitting a Mortgagor to make Draws up to $500 in excess of the Credit Limit, or consent to the postponement of any such term or in any manner grant indulgence to any Mortgagor if in the Servicer's reasonable and prudent determination such waiver, modification, postponement or indulgence is not materially adverse to the Owner, provided, however, that unless the Servicer has obtained the prior written consent of the Owner, the Servicer shall not permit any modification with respect to any Revolving Credit Loan that would change the Mortgage Interest Rate, forgive the payment of principal or interest, reduce or increase the outstanding principal balance (except for actual payments of principal), change the final maturity date on such Revolving Credit Loan or waive a prepayment penalty or charge. In the event of any such modification which has been agreed to in writing by the Owner and which permits the deferral of interest or principal payments on any Revolving Credit Loan, the Servicer shall, on the Business Day immediately preceding the related Remittance Date in any month in which any such principal or interest payment has been deferred, deposit in the Custodial Account from its own funds, in accordance with Section 4.04, the difference between (a) such month's principal and one month's interest at the related Revolving Credit Loan Remittance Rate on the unpaid principal balance of such Revolving Credit Loan and (b) the amount paid by the Mortgagor. The Servicer shall be entitled to reimbursement for such advances to the same extent as for all other advances pursuant to Section 4.05. Without limiting the generality of the foregoing, the Servicer shall continue, and is hereby authorized and empowered, to prepare, execute and deliver, all instruments of satisfaction or cancellation, or of partial or full release, discharge and all other comparable instruments, with respect to the Revolving Credit Loans and with respect to the Mortgaged Properties.
With respect to each Revolving Credit Loan subject to a Pass-Through Transfer, the Servicer may also, without approval from the Rating Agencies, increase the Credit Limit on a Revolving Credit Loan if such increase is consistent with the Servicer’s underwriting policies and a new Appraised Value is obtained and the Combined Loan-to-Value Ratio of the Revolving Credit Loan after giving effect to the increase is less than or equal to the Combined Loan-to-Value Ratio of the Revolving Credit Loan as of the Cut-off Date.
With respect to each Revolving Credit Loan subject to a Pass-Through Transfer, the Servicer may increase the Credit Limits on up to 10% of the number of Revolving Credit Loans as of the Cut-off Date of such Pass-Through Transfer if the increase in the Credit Limit of any single Revolving Credit Loan does not cause the Combined Loan-to-Value Ratio of such Revolving Credit Loan to exceed 100%.
With respect to each Revolving Credit Loan subject to a Pass-Through Transfer, the Servicer, without prior approval from the Rating Agencies, the Master Servicer or the related trustee, may solicit Mortgagors for a reduction in Margins on up to 10% of the number of Revolving Credit Loans as of the Cut-off Date of such Pass-Through Transfer, provided that the cumulative impact of any such Margin reductions shall not result in the reduction of the weighted average Margin of the Revolving Credit Loans as of the Cut-off Date of such Pass-Through Transfer by more than 25 basis points taking into account any prior reductions. In no event shall the Servicer modify the final maturity date on such Revolving Credit Loan.
The Servicer shall perform all of its servicing responsibilities hereunder or may cause a subservicer to perform any such servicing responsibilities on its behalf, but the use by the Servicer of a subservicer shall not release the Servicer from any of its obligations hereunder and the Servicer shall remain responsible hereunder for all acts and omissions of each subservicer as fully as if such acts and omissions were those of the Servicer. Any such subservicer must be a Fannie Mae approved seller/servicer or a Freddie Mac seller/servicer in good standing and no event shall have occurred, including but not limited to, a change in insurance coverage, which would make it unable to comply with the eligibility requirements for lenders imposed by Fannie Mae or for seller/servicers by Freddie Mac, or which would require notification to Fannie Mae or Freddie Mac. The Servicer shall pay all fees and expenses of each subservicer from its own funds, and a subservicer’s fee shall not exceed the Servicing Fee.
At the cost and expense of the Servicer, without any right of reimbursement from the Custodial Account, the Servicer shall be entitled to terminate the rights and responsibilities of a subservicer and arrange for any servicing responsibilities to be performed by a successor subservicer meeting the requirements in the preceding paragraph, provided, however, that nothing contained herein shall be deemed to prevent or prohibit the Servicer, at the Servicer's option, from electing to service the related Revolving Credit Loans itself. In the event that the Servicer's responsibilities and duties under this Agreement are terminated pursuant to Section 8.04, 9.01 or 10.01, and if requested to do so by the Owner, the Servicer shall at its own cost and expense terminate the rights and responsibilities of each subservicer effective as of the date of termination of the Servicer. The Servicer shall pay all fees, expenses or penalties necessary in order to terminate the rights and responsibilities of each subservicer from the Servicer's own funds without reimbursement from the Owner.
Notwithstanding any of the provisions of this Agreement relating to agreements or arrangements between the Servicer and a subservicer or any reference herein to actions taken through a subservicer or otherwise, the Servicer shall not be relieved of its obligations to the Owner and shall be obligated to the same extent and under the same terms and conditions as if it alone were servicing and administering the Revolving Credit Loans. The Servicer shall be entitled to enter into an agreement with a subservicer for indemnification of the Servicer by the subservicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.
Any subservicing agreement and any other transactions or services relating to the Revolving Credit Loans involving a subservicer shall be deemed to be between such subservicer and Servicer alone, and the Owner shall have no obligations, duties or liabilities with respect to such Subservicer including no obligation, duty or liability of Owner to pay such subservicer's fees and expenses. For purposes of distributions and advances by the Servicer pursuant to this Agreement, the Servicer shall be deemed to have received a payment on a Revolving Credit Loan when a subservicer has received such payment.
Section 4.02. Collection of Revolving Credit Loan Payments.
Continuously from the Effective Date until the date each Revolving Credit Loan ceases to be subject to this Agreement, the Servicer will proceed with reasonable diligence to collect all payments due under each Revolving Credit Loan when the same shall become due and payable and shall, to the extent such procedures shall be consistent with this Agreement, follow such collection procedures as it follows with respect to mortgage loans comparable to the Revolving Credit Loans and held for its own account. Further, the Servicer will take reasonable care in ascertaining and estimating annual ground rents, taxes, assessments, water rates, fire and hazard insurance premiums, mortgage insurance premiums, and all other charges that, as provided in the Mortgage, will become due and payable to the end that the installments payable by the Mortgagors will be sufficient to pay such charges as and when they become due and payable.
Section 4.03. Realization Upon Defaulted Revolving Credit Loans.
The Servicer shall use its reasonable efforts, consistent with the procedures that the Servicer would use in servicing loans for its own account and the requirements of the Fannie Mae Guide, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Revolving Credit Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 4.01. The Servicer shall use its reasonable efforts to realize upon defaulted Revolving Credit Loans in such manner as will maximize the receipt of principal and interest by the Owner, taking into account, among other things, the timing of foreclosure proceedings. The foregoing is subject to the provisions that, in any case in which Mortgaged Property shall have suffered damage, the Servicer shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (i) that such restoration will increase the proceeds of liquidation of the related Revolving Credit Loan to the Owner after reimbursement to itself for such expenses, and (ii) that such expenses will be recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Section 4.05. The Servicer shall notify the Owner in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions as Servicing Advances; provided, however, that it shall be entitled to reimbursement therefor from the related Mortgaged Property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Owner otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector. Upon completion of the inspection, the Servicer shall promptly provide the Owner with a written report of the environmental inspection. After reviewing the environmental inspection report, the Owner shall determine how the Servicer shall proceed with respect to the Mortgaged Property.
The Servicer shall charge off any Revolving Credit Loan in accordance with the Servicer’s policies and procedures if the Servicer reasonably believes that Liquidation Proceeds with respect to any such Revolving Credit Loan would not be increased as a result of foreclosure or other action or if the Revolving Credit Loan becomes 180 days past due.
Section 4.04. Establishment of Custodial Accounts; Deposits in Custodial Accounts.
The Servicer shall segregate and hold all funds collected and received pursuant to each Revolving Credit Loan separate and apart from any of its own funds and general assets and shall establish and maintain one or more Custodial Accounts. Each Custodial Account shall be established with a Qualified Depository. To the extent such funds are not deposited in a Custodial Account, such funds may be invested in Permitted Investments for the benefit of the Owner (with any income earned thereon for the benefit of the Servicer). Funds deposited in the Custodial Account may be drawn on by the Servicer in accordance with Section 4.05. The creation of any Custodial Account shall be evidenced by a letter agreement in the form shown in Exhibit B hereto. The original of such letter agreement shall be furnished to the Owner upon request. The Servicer acknowledges and agrees that the Servicer shall bear any losses incurred with respect to Permitted Investments. The amount of any such losses shall be immediately deposited by the Servicer in the Custodial Account, as appropriate, out of the Servicer's own funds, with no right to reimbursement therefor.
(i) all payments on account of principal, including Principal Prepayments and penalties, on the Revolving Credit Loans received after the Cut-off Date;
(ii) all payments on account of interest on the Revolving Credit Loans adjusted to the related Revolving Credit Loan Remittance Rate received after the Cut-off Date;
(iii) all Liquidation Proceeds and REO Disposition Proceeds received after the Cut-off Date;
(iv) any net amounts received by the Servicer after the Cut-off Date in connection with any REO Property pursuant to Section 4.13;
(vii) any amounts received after the Cut-off Date and required to be deposited in the Custodial Account pursuant to Section 6.02.
The foregoing requirements for deposit in the Custodial Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of late payment charges, assumption fees and Cancellation Fees, to the extent permitted by Section 6.01, need not be deposited by the Servicer in the Custodial Account. Any interest paid on funds deposited in the Custodial Account by the Qualified Depository shall accrue to the benefit of the Servicer and the Servicer shall be entitled to retain and withdraw such interest from the Custodial Account pursuant to Section 4.05(iii).
Section 4.05. Permitted Withdrawals From the Custodial Account.
The Servicer may, from time to time, make withdrawals from the Custodial Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the manner provided for in Section 5.01;
(ii) to reimburse itself for unreimbursed Servicing Advances, the Servicer's right to reimburse itself pursuant to this subclause (iii) with respect to any Revolving Credit Loan being limited to Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds received after the Cut-off Date related to such Revolving Credit Loan;
(iii) to pay to itself as servicing compensation (a) any interest earned on funds in the Custodial Account (all such interest to be withdrawn monthly not later than each Remittance Date) and (b) the Servicing Fee from that portion of any payment attributable to interest on a particular Revolving Credit Loan;
(iv) reserved;
(v) to reimburse itself for any Nonrecoverable Advances;
(vi) to transfer funds to another Qualified Depository in accordance with Section 4.09 hereof;
(vii) to remove funds inadvertently placed in the Custodial Account in error by the Servicer; and
(viii) to clear and terminate the Custodial Account upon the termination of this Agreement.
Section 4.06. Establishment of Escrow Accounts; Deposits in Escrow Accounts.
In the event that any Revolving Credit Loan requires the establishment of an Escrow Account, the Servicer shall segregate and hold all funds collected and received pursuant to each Revolving Credit Loan which constitute Escrow Payments separate and apart from any of its own funds and general assets and shall establish and maintain one or more Escrow Accounts. Each such Escrow Account shall be established with a Qualified Depository. To the extent such funds are not deposited in an Escrow Account, such funds may be invested in Permitted Investments. Funds deposited in an Escrow Account may be drawn on by the Servicer in accordance with Section 4.07. The creation of any Escrow Account shall be evidenced by a letter agreement in the form shown in Exhibit C. The original of such letter agreement shall be furnished to the Owner upon request. The Servicer acknowledges and agrees that the Servicer shall bear any losses incurred with respect to Permitted Investments. The amount of any such losses shall be immediately deposited by the Servicer in the Escrow Account, as appropriate, out of the Servicer's own funds, with no right to reimbursement therefor.
The Servicer shall deposit in a mortgage clearing account on a daily basis, and in the Escrow Account or Accounts no later than the second Business Day after receipt of funds and retain therein:
(i) all Escrow Payments collected on account of the Revolving Credit Loans, for the purpose of effecting timely payment of any items as are required under the terms of this Agreement;
(ii) all Insurance Proceeds which are to be applied to the restoration or repair of any Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose Escrow Payments are insufficient to cover escrow disbursements.
Section 4.07. Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments, water rates, fire and hazard insurance premiums and comparable items;
(ii) to reimburse Servicer for any Servicing Advance made by Servicer with respect to a related Revolving Credit Loan but only from amounts received on the related Revolving Credit Loan which represent late payments or collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be determined to be overages;
(iv) for transfer to the Custodial Account in connection with an acquisition of REO Property;
(v) for application to restoration or repair of the Mortgaged Property;
(vi) to pay to the Servicer, or to the Mortgagor to the extent required by law, any interest paid on the funds deposited in the Escrow Account;
(vii) to pay to the Mortgagors or other parties Insurance Proceeds deposited in accordance with Section 4.06;
(viii) to remove funds inadvertently placed in an Escrow Account in error by the Servicer; and
(ix) to clear and terminate the Escrow Account on the termination of this Agreement.
Section 4.08. Payment of Taxes, Insurance and Other Charges, Collections Thereunder.
With respect to each Revolving Credit Loan that requires the establishment of an Escrow Account, the Servicer shall maintain accurate records reflecting the status of ground rents, taxes, assessments, water rates and other charges which are or may become a lien upon the Mortgaged Property and the status of fire and hazard insurance coverage and shall obtain, from time to time, all bills for the payment of such charges, including renewal premiums and shall effect payment thereof prior to the applicable penalty or termination date and at a time appropriate for securing maximum discounts allowable, employing for such purpose deposits of the Mortgagor in the Escrow Account which shall have been estimated and accumulated by the Servicer in amounts sufficient for such purposes, as allowed under the terms of the Mortgage or applicable law. To the extent that the Mortgage does not provide for Escrow Payments, the Servicer shall determine that any such payments are made by the Mortgagor at the time they first become due. The Servicer assumes full responsibility for the timely payment of all such bills and shall effect timely payments of all such bills irrespective of the Mortgagor's faithful performance in the payment of same or the making of the Escrow Payments and shall make advances from its own funds to effect such payments.
Section 4.09. Transfer of Accounts.
Section 4.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Revolving Credit Loan fire and hazard insurance with extended coverage as is customary in the area where the Mortgaged Property is located in an amount which is equal to the lesser of (i) the maximum insurable value of the improvements securing such Revolving Credit Loan or (ii) the greater of (a) the combined outstanding principal balance of the Revolving Credit Loan and any First Lien, and (b) the percentage such that the proceeds thereof shall be sufficient to prevent the Mortgagor and/or the Mortgagee from becoming a co-insurer. If the Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as being a special flood hazard area that has federally-mandated flood insurance requirements, the Servicer will cause to be maintained a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (i) the outstanding principal balance of the Revolving Credit Loan, (ii) the maximum insurable value of the improvements securing such Revolving Credit Loan or (iii) the maximum amount of insurance which is available under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall also maintain on the REO Property, fire and hazard insurance with extended coverage in an amount which is at least equal to the maximum insurable value of the improvements which are a part of such property, liability insurance and, to the extent required and available under the Flood Disaster Protection Act of 1973, as amended, flood insurance in an amount as provided above. Any amounts collected by the Servicer under any such policies other than amounts to be deposited in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or REO Property, or released to the Mortgagor in accordance with the Servicer's normal servicing procedures, shall be deposited in the Custodial Account, subject to withdrawal pursuant to Section 4.05. It is understood and agreed that no other additional insurance need be required by the Servicer or the Mortgagor or maintained on property acquired in respect of the Revolving Credit Loans, other than pursuant to the Fannie Mae Guide or such applicable state or federal laws and regulations as shall at any time be in force and as shall require such additional insurance. All such policies shall be endorsed with standard mortgagee clauses with loss payable to the Servicer and its successors and/or assigns and shall provide for at least thirty days prior written notice of any cancellation, reduction in the amount or material change in coverage to the Servicer. The Servicer shall not interfere with the Mortgagor's freedom of choice in selecting either his insurance carrier or agent, provided, however, that the Servicer shall not accept any such insurance policies from insurance companies unless such companies currently reflect a General Policy Rating in Best's Key Rating Guide currently acceptable to Fannie Mae and are licensed to do business in the state wherein the property subject to the policy is located.
Section 4.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a mortgage impairment or blanket policy issued by an issuer that has a Best rating of A:VI insuring against hazard losses on all of Mortgaged Properties securing the Revolving Credit Loans, then, to the extent such policy provides coverage in an amount equal to the amount required pursuant to Section 4.10 and otherwise complies with all other requirements of Section 4.10, the Servicer shall conclusively be deemed to have satisfied its obligations as set forth in Section 4.10, it being understood and agreed that such policy may contain a deductible clause, in which case the Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy complying with Section 4.10, and there shall have been one or more losses which would have been covered by such policy, deposit in the Custodial Account the amount not otherwise payable under the blanket policy because of such deductible clause. In connection with its activities as Servicer of the Revolving Credit Loans, the Servicer agrees to prepare and present, on behalf of the Owner, claims under any such blanket policy in a timely fashion in accordance with the terms of such policy. Upon request of the Owner, the Servicer shall cause to be delivered to the Owner a certified true copy of such policy.
Section 4.12. Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity bond and an errors and omissions insurance policy, with broad coverage with responsible companies on all officers, employees or other persons acting in any capacity with regard to the Revolving Credit Loans and who handle funds, money, documents and papers relating to the Revolving Credit Loans. The Fidelity Bond and errors and omissions insurance shall be in the form of the Mortgage Banker's Blanket Bond and shall protect and insure the Servicer against losses, including forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of such persons. Such Fidelity Bond and errors and omissions insurance shall also protect and insure the Servicer against losses in connection with the failure to maintain any insurance policies required pursuant to this Agreement and the release or satisfaction of a Revolving Credit Loan without having obtained payment in full of the indebtedness secured thereby. No provision of this Section 4.12 requiring the Fidelity Bond and errors and omissions insurance shall diminish or relieve the Servicer from its duties and obligations as set forth in this Agreement. The minimum coverage under any such Fidelity Bond and insurance policy shall be at least equal to the corresponding amounts required by Fannie Mae in the Fannie Mae Guide or by Freddie Mac in the Freddie Mac Guide. The Servicer shall, upon request of Owner, deliver to the Owner a certificate from the surety and the insurer as to the existence of the Fidelity Bond and errors and omissions insurance policy and shall obtain a statement from the surety and the insurer that such Fidelity Bond or insurance policy shall in no event be terminated or materially modified without thirty days prior written notice to the Owner. The Servicer shall notify the Owner within five Business Days of receipt of notice that such Fidelity Bond or insurance policy will be, or has been, materially modified or terminated. The Owner and its successors or assigns as their interests may appear must be named as loss payees on the Fidelity Bond and as additional insured on the errors and omissions policy.
Section 4.13. Title, Management and Disposition of REO Property.
The Servicer shall notify the Owner in accordance with Accepted Servicing Practices of each acquisition of REO Property upon such acquisition, and thereafter assume the responsibility for marketing such REO Property in accordance with Accepted Servicing Practices. Thereafter, the Servicer shall continue to provide certain administrative services to the Owner relating to such REO Property as set forth in this Section 4.13. The REO Property must be sold within three years following the end of the calendar year of the date of acquisition, unless a REMIC election has been made with respect to the arrangement under which the Revolving Credit Loans and REO Property are held and (i) the Owner shall have been supplied with an Opinion of Counsel to the effect that the holding by the related trust of such Mortgaged Property subsequent to such three-year period (and specifying the period beyond such three-year period for which the Mortgaged Property may be held) will not result in the imposition of taxes on “prohibited transactions” of the related trust as defined in Section 860F of the Code, or cause the related REMIC to fail to qualify as a REMIC, in which case the related trust may continue to hold such Mortgaged Property (subject to any conditions contained in such Opinion of Counsel), or (ii) the Owner (at the Servicer’s expense) or the Servicer shall have applied for, prior to the expiration of such three-year period, an extension of such three-year period in the manner contemplated by Section 856(e)(3) of the Code, in which case the three-year period shall be extended by the applicable period. If a period longer than three years is permitted under the foregoing sentence and is necessary to sell any REO Property, (i) the Servicer shall report monthly to the Owner as to progress being made in selling such REO Property and (ii) if, with the written consent of the Owner, a purchase money mortgage is taken in connection with such sale, such purchase money mortgage shall name the Servicer as mortgagee, and such purchase money mortgage shall not be held pursuant to this Agreement, but instead a separate participation agreement between the Servicer and Owner shall be entered into with respect to such purchase money mortgage.
The Servicer shall deposit or cause to be deposited, on a daily basis in each Custodial Account all revenues received with respect to the related REO Property and shall withdraw therefrom funds necessary for the proper operation, management and maintenance of the REO Property, including the cost of maintaining any hazard insurance pursuant to Section 4.10 hereof. The Servicer shall maintain separate records with respect to each REO Property identifying all deposits and withdrawals from the Custodial Account for each REO Property.
The Servicer shall furnish to the Owner on each Remittance Date, an operating statement for each REO Property covering the operation of each REO Property for the previous month. Such operating statement shall be accompanied by such other information as the Owner shall reasonably request.
Notwithstanding anything to the contrary set forth in this Section 4.13, the parties hereto hereby agree that the Owner, at its option, shall be entitled to manage, conserve, protect and operate each REO Property for its own benefit (such option, an "REO Option"). In connection with the exercise of an REO Option, the prior two paragraphs and the related provisions of Section 4.03 and Section 4.04(iii) (such provisions, the "REO Marketing Provisions") shall be revised as follows. Following the acquisition of any Mortgaged Property, the Servicer shall submit a detailed invoice to the Owner for all related Servicing Advances and any anticipated expenses of transfer to Owner and, upon exercising the REO Option, the Owner shall promptly reimburse the Servicer for such amounts. In the event the REO Option is exercised with respect to an REO Property, Section 4.04 (iii) shall not be applicable thereto. References made in Section 4.03 with respect to the reimbursement of Servicing Advances shall, for purposes of such REO Property, be deemed to be covered by this paragraph. The Owner acknowledges that, in the event it exercises an REO Option, with respect to the related REO Property, there shall be no breach by the Servicer based upon or arising out of the Servicer's failure to comply with the REO Marketing Provisions.
Section 4.14. Reserved.
Section 4.15. Notification of Maturity Date.
With respect to each Revolving Credit Loan, the Servicer shall execute and deliver to the Mortgagor any and all necessary notices required under applicable law and the terms of the related Mortgage Note and Mortgage regarding the maturity date if required under applicable law.
Section 4.16. Subordination of Lien Priority.
(a) The Servicer shall not consent to the placement of a lien on the Mortgaged Property senior to that of the Mortgage securing the Revolving Credit Loan unless (i) such action is consistent with reasonable commercial practice and (ii) such consent is given in any one of the following situations:
(i) such Mortgage succeeded to a first lien position after the related Revolving Credit Loan was purchased by the Owner and, immediately following the placement of such senior lien, such Mortgage is in a second lien position and both (I) the outstanding principal amount of the mortgage loan secured by such senior lien is no greater than the outstanding principal amount of the first mortgage loan secured by the Mortgaged Property as of the date the related Revolving Credit Loan was purchased by the Owner and (II) the updated CLTV of such Revolving Credit Loan is not greater than the CLTV of such Revolving Credit Loan as of the date such Revolving Credit Loan was conveyed to the Owner; or
(ii) such senior lien secures a mortgage loan that refinances an existing First Lien and (I) the outstanding principal amount of the replacement first mortgage loan immediately following such refinancing is not greater than the outstanding principal amount of such existing First Lien at the date of such refinancing and (II) the updated CLTV of the applicable Revolving Credit Loan is not greater than the CLTV of such Revolving Credit Loan as of the date such Revolving Credit Loan was purchased by the Owner.
(b) Notwithstanding (a)(i) or (a)(ii) of this section, the Servicer shall not consent to the placement of a lien on the Mortgaged Property senior to that of the Mortgage securing the Revolving Credit Loan if:
(i) the original term of the new senior lien is greater than the original term of the prior senior lien;
(ii) the new senior lien is a balloon loan;
(iii) the new senior lien is a negatively amortizing loan;
(iv) the new senior lien has a higher coupon than the prior senior lien;
(v) the new senior lien is a cashout refinancing;
(vi) the monthly payment on the new senior lien is greater than the monthly payment of the prior senior lien; or
(vii) the debt to income ratio of the new senior lien is greater than the debt to income ratio of the prior senior lien.
Section 4.17 Waiver of Prepayment Penalties.
The Servicer shall not waive any prepayment penalty unless: (i) such waiver is standard and customary in servicing similar mortgage loans to the Revolving Credit Loans (including any waiver of a prepayment penalty in connection with a refinancing of a Revolving Credit Loan related to a default or a reasonably foreseeable default), and (ii) such waiver, in the reasonable judgment of the Servicer, would maximize recovery of total proceeds from the Revolving Credit Loan, taking into account the value of such prepayment penalty and the related Revolving Credit Loan. In no event will the Servicer waive a prepayment penalty in connection with a refinancing of a Revolving Credit Loan that is not related to a default or a reasonably foreseeable default. If a prepayment penalty is waived, but does not meet the standards described above, then the Servicer is required to pay the amount of such waived prepayment penalty by remitting such amount to the Owner by the Remittance Date.
ARTICLE V
PAYMENTS TO THE OWNER
Section 5.01. Remittances.
The Servicer shall be required to make monthly remittances to the Owner on each Remittance Date by wire transfer to the related account specified on Exhibit G hereto. Such monthly remittances shall consist of: (i) all amounts credited to the Custodial Account as of the close of business on the last day of the related Collection Period, net of charges against or withdrawals from the Custodial Account pursuant to Section 4.05, other than Principal Prepayments received after the end of the preceding Collection Period, minus (ii) any amounts attributable to Monthly Payments collected after the Cut-off Date but due on a Due Date or Dates subsequent to the last day of the related Collection Period, which amounts shall be remitted on the related Remittance Date next succeeding the Collection Period for such amounts.
On each Remittance Date, the Servicer shall furnish to the Owner, a monthly remittance report in accordance with Section 5.02. On each Remittance Date, the monthly remittance report shall indicate the aggregate amount of Additional Balances to be transferred to the Owner on such date. If the notice required to be delivered to the Owner as described above is received by the Owner by 10:00 a.m. Eastern Time on a given Remittance Date, the Owner shall, by 5:00 p.m. Eastern Time on such Remittance Date, remit to the Servicer by wire transfer the amount of any such Additional Balances. If the notice required to be delivered to the Owner as described above is received by the Owner after 10:00 a.m. Eastern Time on a given Remittance Date, the Owner shall remit the amount of any such Additional Balances to the designated account no later than 5:00 p.m. on the following Business Day.
Section 5.02. Statements to the Owner.
The Servicer shall furnish to the Owner an individual Revolving Credit Loan accounting report (a "Report"), as of the last day of the Collection Period of each month, in the Servicer's assigned loan number order to document Revolving Credit Loan payment activity on an individual Revolving Credit Loan basis. With respect to each month, such Report shall be received by the Owner (i) no later than the fifteenth (15^th) calendar day of month of the related Remittance Date on a disk or tape or other computer-readable format, in such format as may be mutually agreed upon by both the Owner and the Servicer, and (ii) no later than the twentieth (20^th) calendar day of month of the related Remittance Date in hard copy, which Report shall contain the following:
(i) Additional Balances created during the Collection Period;
(ii) with respect to each Monthly Payment, the amount of such remittance allocable to interest, principal, Principal Prepayments, Cancellation Fees and prepayment penalties;
(ii) the amount of servicing compensation received by the Servicer during the prior Collection Period;
(iii) the aggregate Stated Principal Balance of the Revolving Credit Loans;
(iv) the number and aggregate outstanding principal balances of Revolving Credit Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3) 90 days or more; (b) as to which foreclosure has commenced; and (c) as to which REO Property has been acquired; and
(v) such other reports as may reasonably be required by the Owner.
The Servicer shall also provide with each such Report a trial balance, sorted in the Owner's assigned loan number order, and such other loan level information as described on Exhibits E and F, in electronic tape form.
The Servicer shall prepare and file any and all information statements or other filings required to be delivered to any governmental taxing authority or to Owner pursuant to any applicable law with respect to the Revolving Credit Loans and the transactions contemplated hereby. In addition, the Servicer shall provide the Owner with such information concerning the Revolving Credit Loans as is necessary for the Owner to prepare its federal income tax return as the Owner may reasonably request from time to time.
Section 5.03. Liquidation Reports.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01. Assumption Agreements.
The Servicer will, to the extent it has knowledge of any conveyance or prospective conveyance by any Mortgagor of a Mortgaged Property (whether by absolute conveyance or by contract of, sale, and whether or not the Mortgagor remains or is to remain liable under the Mortgage Note and/or the Mortgage), exercise its rights to accelerate the maturity of such Revolving Credit Loan under any "due-on-sale" clause to the extent permitted by law; provided, however, that the Servicer shall not exercise any such rights if prohibited by law or the terms of the Mortgage Note from doing so. If the Servicer reasonably believes it is unable under applicable law to enforce such "due-on-sale" clause, the Servicer, with the approval of the Owner (such approval not to be unreasonably withheld), will enter into an assumption agreement with the person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant to which such person becomes liable under the Mortgage Note and, to the extent permitted by applicable state law, the Mortgagor remains liable thereon. Where an assumption is allowed pursuant to this Section 6.01, the Servicer is authorized to enter into a substitution of liability agreement with the person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed pursuant to which the original mortgagor is released from liability and such Person is substituted as mortgagor and becomes liable under the related Mortgage Note. Any such substitution of liability agreement shall be in lieu of an assumption agreement.
In connection with any such assumption or substitution of liability, the Servicer shall follow the underwriting practices and procedures of the Fannie Mae Guide. With respect to an assumption or substitution of liability, the Mortgage Interest Rate borne by the related Mortgage Note and the amount of the Monthly Payment may not be changed. The Servicer shall notify the Owner that any such substitution of liability or assumption agreement has been completed by forwarding to the Owner the original of any such substitution of liability or assumption agreement, which document shall be added to the related Revolving Credit Loan Documents and shall, for all purposes, be considered a part of such related mortgage file to the same extent as all other documents and instruments constituting a part thereof. All fees collected by the Servicer for entering into an assumption or substitution of liability agreement shall belong to the Servicer.
Notwithstanding the foregoing paragraphs of this section or any other provision of this Agreement, the Servicer shall not be deemed to be in default, breach or any other violation of its obligations hereunder by reason of any assumption of a Revolving Credit Loan by operation of law or any assumption which the Servicer may be restricted by law from preventing, for any reason whatsoever. For purposes of this Section 6.01, the term "assumption" is deemed to also include a sale of the Mortgaged Property subject to the Mortgage that is not accompanied by an assumption or substitution of liability agreement.
Section 6.02. Satisfaction of Mortgages and Release of Revolving Credit Loan Documents.
Upon the payment in full of any Revolving Credit Loan following the end of the related Draw Period, or the determination by the Servicer that all amounts which it expects to recover from or on account of a Charged-Off Revolving Credit Loan have been recovered and no further Liquidation Proceeds or Recoveries will be received in connection with such Charged-Off Revolving Credit Loan, the Servicer will immediately notify the Owner or the Custodian with a certification and request for release by a Servicing Officer, which certification shall include a statement to the effect that all amounts received in connection with such payment which are required to be deposited in the Custodial Account pursuant to Section 4.04 have been so deposited, and a request for delivery to the Servicer of the portion of the Revolving Credit Loan Documents held by the Owner or the Custodian, and unless the related Revolving Credit Loans are the subject of a Pass-Through Transfer, such request is to be acknowledged by the Owner. Upon receipt of such certification and request, the Owner shall promptly release or cause the Owner or the Custodian to promptly release the related Revolving Credit Loan Documents to the Servicer and the Servicer shall prepare and deliver for execution by the Owner or at the Owner's option execute under the authority of a power of attorney delivered to the Servicer by the Owner any satisfaction or release. No expense incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the Custodial Account.
In the event the Servicer satisfies or releases a Mortgage without having obtained payment in full of the indebtedness secured by the Mortgage or should it otherwise prejudice any right the Owner may have under the mortgage instruments, the Servicer, upon written demand, shall remit within two Business Days to the Owner the then outstanding principal balance of the related Revolving Credit Loan by deposit thereof in the Custodial Account. The Servicer shall maintain the Fidelity Bond insuring the Servicer against any loss it may sustain with respect to any Revolving Credit Loan not satisfied in accordance with the procedures set forth herein.
From time to time and as appropriate for the servicing or foreclosure of the Revolving Credit Loans, upon request of the Servicer and delivery to the Owner or the Custodian of a servicing receipt signed by a Servicing Officer (and unless the related Revolving Credit Loans are the subject of a Pass-Through Transfer, acknowledged by the Owner), the Owner or the Custodian shall release the portion of the Revolving Credit Loan Documents held by the Owner or the Custodian to the Servicer. Such servicing receipt shall obligate the Servicer to promptly return the related Revolving Credit Loan Documents to the Owner or the Custodian, when the need therefor by the Servicer no longer exists, unless the Revolving Credit Loan has been liquidated or has become a Charged-Off Revolving Credit Loan and the Liquidation Proceeds or Recoveries, as applicable, relating to the Revolving Credit Loan have been deposited in the Custodial Account or such documents have been delivered to an attorney, or to a public trustee or other public official as required by law, for purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or non-judicially, and the Servicer has promptly delivered to the Owner or the Custodian a certificate of a Servicing Officer certifying as to the name and address of the Person to which such documents were delivered and the purpose or purposes of such delivery. Upon receipt of a certificate of a Servicing Officer stating that such Revolving Credit Loan was liquidated or charged-off, the servicing receipt shall be released by the Owner or the Custodian, as applicable, to the Servicer.
Section 6.03. Servicing Compensation.
As compensation for its services hereunder, the Servicer shall be entitled to withdraw from the Custodial Account or to retain from interest payments on the Revolving Credit Loans the amounts provided for as the Servicer's Servicing Fee. Additional servicing compensation in the form of assumption fees, as provided in Section 6.01, late payment charges, Cancellation Fees and other ancillary fees shall be retained by the Servicer to the extent not required to be deposited in the Custodial Account. The Servicer shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder and shall not be entitled to reimbursement therefor except as specifically provided for.
Section 6.04 Annual Statement as to Compliance.
The Servicer will deliver to the Owner or to a master servicer designated by the Owner in connection with a Pass-Through Transfer on or before March 15 of each year, beginning with March 15, 2006, an Officer’s Certificate in a form acceptable for filing with the Securities and Exchange Commission as an exhibit to a Form 10-K stating that (i) a review of the activities of the Servicer during the preceding calendar year and of performance under this Agreement has been made under such officers' supervision, (ii) the Servicer has fully complied with the provisions of this Agreement and (iii) to the best of such officers' knowledge, based on such review, the Servicer has fulfilled all of its obligations under this Agreement throughout such year, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof.
Section 6.05 Annual Independent Certified Public Accountants' Servicing Report.
On or before March 15 of each year beginning March 15, 2006, the Servicer at its expense shall cause a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants to furnish a statement to the Owner or to a master servicer designated by the Owner in connection with a Pass-Through Transfer in a form acceptable for filing with the Securities and Exchange Commission as an exhibit to a Form 10-K to the effect that such firm has examined certain documents and records relating to the servicing of mortgage loans by the Servicer generally that include a sampling of the Revolving Credit Loans, the provisions of Article II and Article IV have been complied with and, on the basis of such an examination conducted substantially in accordance with the Uniform Single Attestation Program for Mortgage Bankers, such servicing has been conducted in compliance with this Agreement, except for (i) such exceptions as such firm shall believe to be immaterial, and (ii) such other exceptions as shall be set forth in such statement.
Section 6.06. Owner's Right to Examine Servicer Records.
The Servicer shall provide to the Owner and any supervisory agents or examiners representing a state or federal governmental agency having jurisdiction over the Owner, including but not limited to OTS, FDIC and other similar entities, access to any documentation regarding the Revolving Credit Loans in the possession of the Servicer which may be required by any applicable regulations. Such access shall be afforded without charge, upon reasonable request, during normal business hours and at the offices of the Servicer, and in accordance with the applicable federal government agency, FDIC, OTS, or any other similar regulations.
Section 6.07 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under which the Revolving Credit Loans and REO Property are held, the Servicer shall not take any action, cause the REMIC to take any action or fail to take (or fail to cause to be taken) any action that, under the REMIC Provisions, if taken or not taken, as the case may be could (i) endanger the status of the REMIC as a REMIC or (ii) result in the imposition of a tax upon the REMIC (including but not limited to the tax on “prohibited transactions” as defined in Section 860F(a)(2) of the Code and the tax on “contribution” to a REMIC set forth in Section 860G(d) of the Code unless the Servicer has received an Opinion of Counsel (at the expense of the party seeking to take such actions) to the effect that the contemplated action will not endanger such REMIC status or result in the imposition of any such tax.
Section 6.08 Non-solicitation.
The Servicer shall not knowingly conduct any solicitation exclusively targeted to the Mortgagors for the purpose of inducing or encouraging the early prepayment or refinancing of the related Revolving Credit Loans. It is understood and agreed that promotions undertaken by the Servicer or any agent or affiliate of the Servicer which are directed to the general public at large, including, without limitation, mass mailings based on commercially acquired mailing lists, newspaper, radio and television advertisements shall not constitute solicitation under this section. Nothing contained herein shall prohibit the Servicer from (i) distributing to Mortgagors any general advertising including information brochures, coupon books, or other similar documentation which indicates services the Servicer offers, including refinances or (ii) providing financing of home equity loans to Mortgagors at the Mortgagor’s request.
Section 6.09 Annual Certification.
(a) In the event that the Revolving Credit Loans (or any portion thereof) are subject to a Pass-Through Transfer and for so long as such Revolving Credit Loans are being master serviced by a master servicer designated by the Owner, by March 15 of each year (or if not a business day, the immediately preceeding Business Day), or with respect to any calendar year during which the annual report of the entity which is the depositor (or other party responsible for filing Form 10-K with the Commission (as defined below)) of the Revolving Credit Loans pursuant to a securitization transaction (the "Depositor") on Form 10-K is required to be filed in accordance with the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules and regulations of the Securities Exchange Commission (the "Commission"), fifteen (15) calendar days before the date on which the Depositor's annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations of the Commission (or if not a business day, the immediately preceeding Business Day), an Officer of the Servicer shall execute and deliver an Officer's Certificate to the master servicer for the benefit of such master servicer and its officers, directors and affiliates, certifying as to the follow matters:
(i) Based on my knowledge, the information in the Annual Statement of Compliance, the Annual Independent Public Accountant’s Servicing Report and all servicing reports, officer’s certificates and other information relating to the servicing of the Revolving Credit Loans submitted to the master servicer taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the date of this certification;
(ii) The servicing information required to be provided to the master servicer by the Servicer under this Agreement has been provided to the master servicer;
(iii) I am responsible for reviewing the activities performed by the Servicer under this Agreement and based upon the review required by this Agreement, and except as disclosed in the Annual Statement of Compliance or the Annual Independent Public Accountant’s Servicing Report submitted to the master servicer, the Servicer has, as of the date of this certification fulfilled its obligations under this Agreement; and
(iv) I have disclosed to the master servicer all significant deficiencies relating to the Servicer’s compliance with the minimum servicing standards in accordance with a review conducted in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar standard as set forth in this Agreement.
(b) The Servicer shall indemnify and hold harmless the master servicer and its officers, directors, agents and affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments and other costs and expenses arising out of or based upon a breach by the Servicer or any of its officers, directors, agents or affiliates of its obligations under this Section 6.09 or the negligence, bad faith or willful misconduct of the Servicer in connection therewith. If the indemnification provided for herein is unavailable or insufficient to hold harmless the master servicer, then the Servicer agrees that it shall contribute to the amount paid or payable by the master servicer as a result of the losses, claims, damages or liabilities of the master servicer in such proportion as is appropriate to reflect the relative fault of the master servicer on the one hand and the Servicer on the other in connection with a breach of the Servicer’s obligations under this Section 6.09 or the Servicer’s negligence, bad faith or willful misconduct in connection therewith.
ARTICLE VII
REPORTS TO BE PREPARED BY SERVICER
Section 7.01. Servicer Shall Provide Information as Reasonably Required.
ARTICLE VIII
THE SERVICER
Section 8.01. Indemnification; Third Party Claims.
The Servicer agrees to indemnify the Owner and hold it harmless from and against any and all claims, losses, damages, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that the Owner may sustain in any way related to the failure of the Servicer to perform in any way its duties and service the Revolving Credit Loans in strict compliance with the terms of this Agreement and for breach of any representation or warranty of the Servicer contained herein. The Servicer shall immediately notify the Owner if a claim is made by a third party with respect to this Agreement or the Revolving Credit Loans, assume (with the consent of the Owner and with counsel reasonably satisfactory to the Owner) the defense of any such claim and pay all expenses in connection therewith, including counsel fees, and promptly pay, discharge and satisfy any judgment or decree which may be entered against it or the Owner in respect of such claim but failure to so notify the Owner shall not limit its obligations hereunder. The Servicer agrees that it will not enter into any settlement of any such claim without the consent of the Owner unless such settlement includes an unconditional release of the Owner from all liability that is the subject matter of such claim. The provisions of this Section 8.01 shall survive termination of this Agreement. In no event will either Owner or Servicer be liable to the other party to this Agreement for incidental or consequential damages, including, without limitation, loss of profit or loss of business or business opportunity, regardless of the form of action whether in contract, tort or otherwise.
Section 8.02. Merger or Consolidation of the Servicer.
The Servicer will keep in full effect its existence, rights and franchises as a corporation under the laws of the state of its incorporation except as permitted herein, and will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement or any of the Revolving Credit Loans and to perform its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Servicer shall be a party, or any Person succeeding to the business of the Servicer whether or not related to loan servicing, shall be the successor of the Servicer hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the successor or surviving Person shall be an institution (i) having a GAAP net worth of not less than $25,000,000, (ii) the deposits of which are insured by the FDIC, SAIF and/or BIF, or which is a HUD-approved mortgagee whose primary business is in origination and servicing of first and second lien mortgage loans, and (iii) which is a Fannie Mae or Freddie Mac approved seller/servicer in good standing.
Section 8.03. Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the officers, employees or agents of the Servicer shall be under any liability to the Owner for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment made in good faith; provided, however, that this provision shall not protect the Servicer or any such person against any breach of warranties or representations made herein, or failure to perform in any way its obligations in compliance with any standard of care set forth in this Agreement, or any liability which would otherwise be imposed by reason of negligence or any breach of the terms and conditions of this Agreement. The Servicer and any officer, employee or agent of the Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by the Owner respecting any matters arising hereunder. The Servicer shall not be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its duties to service the Revolving Credit Loans in accordance with this Agreement and which in its opinion may involve it in any expenses or liability; provided, however, that the Servicer may, with the consent of the Owner, which consent shall not be unreasonably withheld, undertake any such action which it may deem necessary or desirable with respect to this Agreement and the rights and duties of the parties hereto. In such event, the reasonable legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities for which the Owner will be liable, and the Servicer shall be entitled to be reimbursed therefor from the Owner upon written demand.
Section 8.04. Servicer Not to Resign.
The Servicer shall not resign from the obligations and duties hereby imposed on it except (i) by mutual consent of the Servicer and the Owner or (ii) upon the determination that its duties hereunder are no longer permissible under applicable law and such incapacity cannot be cured by the Servicer. Any such determination permitting the resignation of the Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to the Owner which Opinion of Counsel shall be in form and substance acceptable to the Owner. No such resignation shall become effective until a successor shall have assumed the Servicer's responsibilities and obligations hereunder in the manner provided in Section 11.01.
Section 8.05. No Transfer of Servicing.
With respect to the retention of the Servicer to service the Revolving Credit Loans hereunder, the Servicer acknowledges that the Owner has acted in reliance upon the Servicer's independent status, the adequacy of its servicing facilities, plan, personnel, records and procedures, its integrity, reputation and financial standing and the continuance thereof. Without in any way limiting the generality of this section, the Servicer shall not either assign this Agreement or the servicing hereunder or delegate its rights or duties hereunder or any portion thereof, or sell or otherwise dispose of all or substantially all of its property or assets, without the prior written approval of the Owner, which approval shall not be unreasonably withheld; provided that the Servicer may assign the Agreement and the servicing hereunder without the consent of Owner to an affiliate of the Servicer to which all servicing of the Servicer is assigned so long as (i) such affiliate is a Fannie Mae and Freddie Mac approved servicer and (ii) if it is intended that such affiliate be spun off to the shareholders of the Servicer, such affiliate have a GAAP net worth of at least $25,000,000 and (iii) such affiliate shall deliver to the Owner a certification pursuant to which such affiliate shall agree to be bound by the terms and conditions of this Agreement and shall certify that such affiliate is a Fannie Mae and Freddie Mac approved servicer in good standing.
ARTICLE IX
DEFAULT
Section 9.01. Events of Default.
In case one or more of the following Events of Default by the Servicer shall occur and be continuing, that is to say:
(i) any failure by the Servicer to remit to the Owner any payment required to be made under the terms of this Agreement which continues unremedied for three (3) Business Days after written notice thereof (it being understood that this subparagraph shall not affect Servicer's obligation pursuant to Section 5.01 to pay default interest on any remittance received by the Owner after the Business Day on which such payment was due); or
(iii) a decree or order of a court or agency or supervisory authority having jurisdiction for the appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of sixty days; or
(vi) the Servicer ceases to be approved by either Fannie Mae or Freddie Mac (to the extent such entities are then operating in a capacity similar to that in which they operate on the Effective Date) as a mortgage loan servicer for more than thirty days to the extent such entities perform similar functions; or
(viii) failure by the Servicer to duly perform, within the required time period, its obligations under Section 6.04, 6.05 or 6.09 which failure continues unremedied for a period of fifteen (15) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Owner or by any Master Servicer responsible for master servicing the Revolving Credit Loans pursuant to a Pass-Through Transfer involving such Revolving Credit Loans;
then, and in each and every such case, so long as an Event of Default shall not have been remedied, the Owner, by notice in writing to the Servicer may, in addition to whatever rights the Owner may have under Section 8.01 and at law or equity to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Servicer under this Agreement and in and to the Revolving Credit Loans and the proceeds thereof without compensating the Servicer for the same. On or after the receipt by the Servicer of such written notice, all authority and power of the Servicer under this Agreement, whether with respect to the Revolving Credit Loans or otherwise, shall pass to and be vested in the successor appointed pursuant to Section 11.01. Upon written request from the Owner, the Servicer shall prepare, execute and deliver, any and all documents and other instruments, place in such successor's possession all Servicing Files, and do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Revolving Credit Loans and related documents, or otherwise, at the Servicer's sole expense. The Servicer agrees to cooperate with the Owner and such successor in effecting the termination of the Servicer's responsibilities and rights hereunder, including, without limitation, the transfer to such successor for administration by it of all cash amounts which shall at the time be credited by the Servicer to the Custodial Account or Escrow Account or thereafter received with respect to the Revolving Credit Loans or any REO Property.
Section 9.02. Waiver of Defaults.
ARTICLE X
TERMINATION
Section 10.01. Termination.
The respective obligations and responsibilities of the Servicer shall terminate upon: (i) the later of the final payment or other liquidation (or any advance with respect thereto) of the last Revolving Credit Loan or the disposition of all REO Property and the remittance of all funds due hereunder; or (ii) by mutual consent of the Servicer and the Owner in writing; or (iii) termination by the Owner pursuant to Section 9.01. Simultaneously with any such termination and the transfer of servicing hereunder, the Servicer shall be entitled to be reimbursed for any outstanding Servicing Advances and Draws funded by the Servicer.
Section 10.02 Removal of Revolving Credit Loans from Inclusion under this Agreement upon a Whole Loan Transfer or a Pass-Through Transfer.
The Servicer acknowledges and the Owner agrees that with respect to some or all of the Revolving Credit Loans, the Owner may effect either (1) one or more Whole Loan Transfers, or (2) one or more Pass-Through Transfers.
With respect to each Whole Loan Transfer or Pass-Through Transfer, as the case may be, effected by the Owner, Owner (i) shall reimburse Servicer for all reasonable out-of-pocket third party costs and expenses related thereto and (ii) shall pay Servicer a reasonable amount representing time and effort expended by Servicer related thereto (which amount shall be reasonably agreed upon by Servicer and Owner prior to the expenditure of such time and effort); provided, however, that for each Whole Loan Transfer and/or Pass-Through Transfer, the sum of such amounts described in subsections (i) and (ii) above shall in no event exceed $5,000. For purposes of this paragraph, all Whole Loan Transfers and/or Pass-Through Transfers made to the same entity within the same accounting cycle shall be considered one Whole Loan Transfer or Pass-Through Transfer.
All Revolving Credit Loans not sold or transferred pursuant to a Whole Loan Transfer or Pass-Through Transfer shall be subject to this Agreement and shall continue to be serviced in accordance with the terms of this Agreement and with respect thereto this Agreement shall remain in full force and effect.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Successor to the Servicer.
Prior to termination of the Servicer's responsibilities and duties under this Agreement pursuant to Sections 8.04, 9.01 or 10.01(ii), the Owner shall (i) succeed to and assume all of the Servicer's responsibilities, rights, duties and obligations under this Agreement, or (ii) appoint a successor having the characteristics set forth in Section 8.02 hereof and which shall succeed to all rights and assume all of the responsibilities, duties and liabilities of the Servicer under this Agreement prior to the termination of the Servicer's responsibilities, duties and liabilities under this Agreement. In connection with such appointment and assumption, the Owner may make such arrangements for the compensation of such successor out of payments on Revolving Credit Loans as the Owner and such successor shall agree. In the event that the Servicer's duties, responsibilities and liabilities under this Agreement should be terminated pursuant to the aforementioned sections, the Servicer shall discharge such duties and responsibilities during the period from the date it acquires knowledge of such termination until the effective date thereof with the same degree of diligence and prudence which it is obligated to exercise under this Agreement, and shall take no action whatsoever that might impair or prejudice the rights or financial condition of its successor. The resignation or removal of the Servicer pursuant to the aforementioned sections shall not become effective until a successor shall be appointed pursuant to this section and shall in no event relieve the Servicer of the representations and warranties made pursuant to Article III and the remedies available to the Owner under Section 8.01, it being understood and agreed that the provisions of such Article III and Section 8.01 shall be applicable to the Servicer notwithstanding any such resignation or termination of the Servicer, or the termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge and deliver to the Servicer and to the Owner an instrument accepting such appointment, whereupon such successor shall become fully vested with all the rights, powers, duties, responsibilities, obligations and liabilities of the Servicer, with like effect as if originally named as a party to this Agreement. Any termination or resignation of the Servicer or this Agreement pursuant to Section 8.04, 9.01 or 10.01 shall not affect any claims that the Owner or Servicer may have against the other arising prior to any such termination or resignation.
The Servicer shall promptly deliver to the successor the funds in the Custodial Account and the Escrow Account and the Servicing Files and related documents and statements held by it hereunder and the Servicer shall account for all funds. The Servicer shall execute and deliver such instruments and do such other things all as may reasonably be required to more fully and definitely vest and confirm in the successor all such rights, powers, duties, responsibilities, obligations and liabilities of the Servicer. The Servicer and the successor shall make arrangements to reimburse the Servicer for unrecovered Servicing Advances which the successor retains hereunder and which would otherwise have been recovered by the Servicer pursuant to this Agreement but for the appointment of the successor servicer.
Upon a successor's acceptance of appointment as such, the Servicer shall notify the Owner of such appointment.
Section 11.02. Amendment.
This Agreement may be amended from time to time by the Servicer and the Owner by written agreement signed by the Servicer and the Owner.
Section 11.03 Recordation of Agreement.
Section 11.04. Governing Law.
Section 11.05. Notices.
(i) if to the Servicer:
500 Enterprise Road
Attention: Mr. Frank Ruhl
Telecopier No.: (215) 682-3396
(ii) if to the Owner:
Mac Arthur Ridge II,
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038
Attention: Ralene Ruyle, President
Telecopier No.: (972) 444-2880
Section 11.06. Severability of Provisions.
Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Revolving Credit Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof. If the invalidity of any part, provision, representation or warranty of this Agreement shall deprive any party of the economic benefit intended to be conferred by this Agreement, the parties shall negotiate, in good faith, to develop a structure the economic effect of which is nearly as possible the same as the economic effect of this Agreement without regard to such invalidity.
Section 11.07. Exhibits
The exhibits to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.
Section 11.08. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(ii) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;
(v) the words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(vi) the term "include" or "including" shall mean without limitation by reason of enumeration.
Section 11.09. Reproduction of Documents.
Section 11.10. Confidentiality of Information.
Section 11.11 Recordation of Assignments of Mortgage.
Section 11.12. Assignment by the Parties.
The Owner shall have the right, without the consent of the Servicer hereof, to assign, in whole or in part, its interest under this Agreement with respect to some or all of the Revolving Credit Loans, and designate any person to exercise any rights of the Owner hereunder, by executing an assignment and assumption agreement reasonably acceptable to the Servicer and the assignee or designee shall accede to the rights and obligations hereunder of the Owner with respect to such Revolving Credit Loans. In no event shall Owner sell a partial interest in any Revolving Credit Loan. All references to the Owner in this Agreement shall be deemed to include its assignees or designees. It is understood and agreed between the Owners and the Servicer that no more than five (5) Persons shall have the right of owner under this Agreement at any one time.
Section 11.13. No Partnership.
Section 11.14. Execution, Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same agreement. Subject to Section 8.05, this Agreement shall inure to the benefit of and be binding upon the Servicer and the Owner and their respective successors and assigns.
Section 11.15. Entire Agreement.
Section 11.16. Third Party Beneficiary.
For purposes of this Agreement, any master servicer designated by the Owner shall be considered a third party beneficiary to this Agreement entitled to all the rights and benefits accruing to any master servicer herein as if it were a direct party to this Agreement.
IN WITNESS WHEREOF, the Servicer and the Owner have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date and year first above written.
EMC MORTGAGE CORPORATION
Owner
By:
Name:
Title:
GMAC MORTGAGE CORPORATION
Servicer
By:
Name:
Title:
EXHIBIT A
REVOLVING CREDIT LOAN SCHEDULE
EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
(date)
To:


	(the "Depository")
By:
Name:
Title:
[ ]
(name of Depository)
By:
Name:
Title:
EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
(date)
To:


	(the "Depository")
By:
Name:
Title:
	[ ]
	(name of Depository)
	By:
	Name:
	Title:
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
	To:	[Wells Fargo Bank, N.A.
		1015 10th Avenue S.E.
		Mpls., MN 55414]
		Attn: ________________

		[Owner] [Address]

	Re:	[Custodial Agreement dated as of ________, by and among _____________________. and [Wells Fargo Bank, N.A.], as Custodian] [Servicing Agreement dated as of August 1, 2005, by and between EMC Mortgage Corporation as Owner and GMAC Mortgage Corporation, as Servicer].
In connection with the administration of the Revolving Credit Loans held by you [as Custodian for the Owner pursuant to the above-captioned Custody Agreement], we request the release, and hereby acknowledge receipt, of the [Custodian's] Mortgage File for the Revolving Credit Loan described below, for the reason indicated.
Revolving Credit Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_______ 1. Mortgage Paid in Full
_______ 2. Foreclosure
_______ 3. Substitution
_______ 4. Other Liquidation (Repurchases, etc.)
_______ 5. Nonliquidation [Reason:_______________________________]
Address to which [Custodian] [Owner] should
Deliver the [Custodian's] Mortgage File:




		By:
			(authorized signer)
	Issuer:
	Address:


	Date:
[Custodian]
[Wells Fargo Bank, N.A.]
[Owner]
Please acknowledge the execution of the above request by your signature and date below:

Signature		Date

Documents returned to [Custodian] [Owner]:


[Custodian] [Owner]		Date
EXHIBIT E
LOAN LEVELFORMAT FOR TAPE INPUT,
SERVICER PERIOD REPORTING
(To Be Provided)
EXHIBIT F
REPORTING DATA FOR DEFAULTED LOANS
(To Be Provided)
EXHIBIT G
WIRE INSTRUCTIONS
Funds to be remitted to the Owner pursuant to Section 5.01 of the Agreement shall be delivered via wire transfer using the following instructions:
BANK: CHASE BANK OF TEXAS
BRANCH: IRVING, TEXAS
ACCOUNT NAME: EMC MORTGAGE CORPORATION
ABA #: 113000609
ACCOUNT #: [_________________]
Reference:[_______________] (cutoff date here) Remit for (servicer name here)
Attention:[__________]
Funds to be remitted to the Servicer pursuant to Section 5.01 of the Agreement shall be delivered via wire transfer using the following instructions:
ABA:
Account Name:
Account Number:
Attention:
Re:
AMENDED AND RESTATED AMENDMENT NUMBER ONE
to the
SERVICING AGREEMENT
Dated as of February 1, 2006
between
EMC MORTGAGE CORPORATION,
as Owner
and
GMAC MORTGAGE CORPORATION,
as Servicer
This AMENDED AND RESTATED AMENDMENT NUMBER ONE (this “Amendment”) is made and entered into this 1^st day of February, 2006, by and between EMC Mortgage Corporation, a Delaware corporation, as owner (the “Owner”) and GMAC Mortgage Corporation, as servicer (the “Servicer”) in connection with the Servicing Agreement, dated as of August 1, 2005, between the above mentioned parties (the “Agreement”). This Amendment is made pursuant to Section 11.02 of the Agreement.
RECITALS
WHEREAS, the parties hereto have entered into the Agreement;
WHEREAS, the Agreement provides that the parties thereto may enter into an amendment to the Agreement;
WHEREAS, the parties hereto desire to amend the Agreement as set forth in this Amendment;
WHEREAS, the Agreement provides that the Agreement may be amended from time to time by the Owner and the Servicer by written agreement signed by the Owner and the Servicer; and
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Agreement.
2. Article I of the Agreement is hereby amended effective as of the date hereof by adding the following definitions to Section 1.01:
Commission or SEC: The Securities and Exchange Commission.
Depositor: The depositor, as such term is defined in Regulation AB, with respect to any Securitization Transaction.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Master Servicer: With respect to any Securitization Transaction, the “master servicer,” if any, identified in the related transaction document.
Pass-Through Transfer: Any transaction involving either (1) a sale or other transfer of some or all of the Revolving Credit Loans directly or indirectly to an issuing entity in connection with an issuance of publicly offered or privately placed, rated or unrated asset-backed securities or (2) an issuance of publicly offered or privately placed, rated or unrated securities, the payments on which are determined primarily by reference to one or more portfolios of revolving credit loans consisting, in whole or in part, of some or all of the Revolving Credit Loans.
Qualified Correspondent: Any Person from which the Servicer purchased Revolving Credit Loans, provided that the following conditions are satisfied: (i) such Revolving Credit Loans were originated pursuant to an agreement between the Servicer and such Person that contemplated that such Person would underwrite revolving credit loans from time to time, for sale to the Servicer, in accordance with underwriting guidelines designated by the Servicer (“Designated Guidelines”) or guidelines that do not vary materially from such Designated Guidelines; (ii) such Revolving Credit Loans were in fact underwritten as described in clause (i) above and were acquired by the Servicer within 180 days after origination; (iii) either (x) the Designated Guidelines were, at the time such Revolving Credit Loans were originated, used by the Servicer in origination of revolving credit loans of the same type as the Revolving Credit Loans for the Servicer’s own account or (y) the Designated Guidelines were, at the time such Revolving Credit Loans were underwritten, designated by the Servicer on a consistent basis for use by lenders in originating revolving credit loans to be purchased by the Servicer; and (iv) the Servicer employed, at the time such Revolving Credit Loans were acquired by the Servicer, pre-purchase or post-purchase quality assurance procedures (which may involve, among other things, review of a sample of revolving credit loans purchased during a particular time period or through particular channels) designed to ensure that Persons from which it purchased revolving credit loans properly applied the underwriting criteria designated by the Servicer.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a sale or other transfer of some or all of the Revolving Credit Loans directly or indirectly to an issuing entity in connection with an issuance of publicly offered or privately placed, rated or unrated asset-backed securities or (2) an issuance of publicly offered or privately placed, rated or unrated securities, the payments on which are determined primarily by reference to one or more portfolios of revolving credit loans consisting, in whole or in part, of some or all of the Revolving Credit Loans.
Servicing Criteria: As of any date of determination, the “servicing criteria” set forth in Item 1122(d) of Regulation AB, or any amendments thereto, a summary of the requirements of which as of the date hereof is attached hereto as Exhibit I for convenience of reference only. In the event of a conflict or inconsistency between the terms of Exhibit I and the text of Item 1122(d) of Regulation AB, the text of Item 1122(d) of Regulation AB shall control (or those Servicing Criteria otherwise mutually agreed to by the Owner, Servicer and any Person that will be responsible for signing any Sarbanes Certification with respect to a Securitization Transaction in response to evolving interpretations of Regulation AB and incorporated into a revised Exhibit I).
Static Pool Information: Static pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not responsible for the overall servicing (as “servicing” is commonly understood by participants in the asset-backed securities market) of Revolving Credit Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Revolving Credit Loans under the direction or authority of the Servicer or a Subservicer.
Subservicer: Any Person that services Revolving Credit Loans on behalf of the Servicer or any Subservicer and is responsible for the performance (whether directly or through Subservicers or Subcontractors) of a substantial portion of the material servicing functions required to be performed by the Servicer under this Agreement or any Reconstitution Agreement that are identified in Item 1122(d) of Regulation AB.
Third-Party Originator: Each Person, other than a Qualified Correspondent, that originated Revolving Credit Loans acquired by the Servicer.
3. Article III of the Agreement is hereby amended effective as of the date hereof by adding the following new clause (i):
(i) As of the date of each Pass-Through Transfer, and except as has been otherwise disclosed to the Owner, any Master Servicer and any Depositor: (1) the Servicer is not aware and has not received notice that any default or servicing related performance trigger has occurred as to any other securitization due to any act or failure to act of the Servicer; (2) no material noncompliance with applicable servicing criteria as to any other securitization involving revolving credit loans involving the Servicer as servicer has been disclosed or reported by the Servicer; (3) the Servicer has not been terminated as servicer in a revolving credit loan securitization, either due to a servicing default or to application of a servicing performance test or trigger; (4) no material changes to the Servicer’s servicing policies and procedures with respect to the servicing function it will perform under this Agreement or any Reconstitution Agreement has occurred in the preceding three years; (5) there are no aspects of the Servicer’s financial condition that could have a material adverse impact on the performance by the Servicer of its servicing obligations hereunder; (6) there are no legal proceedings pending, or known to be contemplated by governmental authorities, against the Servicer that could be material to investors in the securities issued in such Pass-Through Transfer; and (7) there are no affiliations, relationships or transactions relating to the Servicer of a type that are described under Item 1119 of Regulation AB.
4. Article IV of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 4.14:
Section 4.14 Financial Statements.
Upon request by the Purchaser, the Servicer shall provide its financial statements of its parent for the previous two fiscal years.
5. The Agreement is hereby amended effective as of the date hereof by moving clauses (a) through (i) of Article III to Section 3.01.
6. The Agreement is hereby amended effective as of the date hereof by adding the following new Section 3.02:
Section 3.02 Updates.
(a) If so requested by the Owner or any Depositor on any date, the Servicer shall, within five Business Days, and in no event later than seven Business Days following such request, confirm in writing the accuracy of the representations and warranties set forth in clause (i) of this Article III or, if any such representation and warranty is not accurate as of the date of such request, provide reasonably adequate disclosure of the pertinent facts, in writing, to the requesting party.
(b) For the purpose of satisfying its reporting obligation under the Exchange Act with respect to any class of asset-backed securities, the Servicer shall (or shall cause each Subservicer to) (i) notify the Owner, any Master Servicer and any Depositor in writing of (A) any material litigation or governmental proceedings pending against the Servicer or any Subservicer, (B) any affiliations or relationships that develop following the closing date of a Pass-Through Transfer between the Servicer or any Subservicer and any of the parties specified in clause (7) of paragraph (i) of Section 3.01 (and any other parties identified in writing by the requesting party) with respect to such Pass-Through Transfer, (C) any Event of Default under the terms of this Agreement or any reconstitution agreement, (D) any merger, consolidation or sale of substantially all of the assets of the Servicer, and (E) the Servicer’s entry into an agreement with a Subservicer to perform or assist in the performance of any of the Servicer’s obligations under this Agreement or any reconstitution agreement and (ii) provide to the Owner and any Depositor a description of such proceedings, affiliations or relationships.
All notification pursuant to this Section 3.02(b), other than those pursuant to Section 3.02(b)(i)(A), should be sent to:
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751
With a copy to:
Bear, Stearns & Co. Inc.
383 Madison Avenue, 3rd Floor
New, York, NY 10179
Attention: Global Credit Administration
Facsimile: (212) 272-6564
Notifications pursuant to Section 3.01(b)(i)(A) should be sent to:
EMC Mortgage Corporation
2780 Lake Vista Drive
Lewisville, TX 75067
Attention: Associate General Counsel for Loan Administration
Facsimile: (469) 759-4714
With copies to:
Bear, Stearns & Co. Inc.
383 Madison Avenue, 3rd Floor
New, York, NY 10179
Attention: Global Credit Administration
Facsimile: (212) 272-6564
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751
7. Article IV of the Agreement is hereby amended effective as of the date hereof by adding the following after the first sentence of Section 4.01:
In addition, the Servicer shall furnish information regarding the borrower credit files related to such Revolving Credit Loan to credit reporting agencies in compliance with the provisions of the Fair Credit Reporting Act and the applicable implementing regulations.
8. Article IV of the Agreement is hereby amended effective as of the date hereof by revising the first paragraph of Section 4.03 by adding the following after the first sentence:
In determining the delinquency status of any Revolving Credit Loan, the Servicer will use delinquency recognition policies as utilized by the Servicer in connection with the servicing of revolving credit loans on its own securitizations.
9. Article V of the Agreement is hereby amended effective as of the date hereof by deleting Section 5.02 in its entirety and replacing it with the following:
Section 5.02 Statements to the Owner.
The Servicer shall furnish to the Owner an individual Revolving Credit Loan accounting report (a “Report”), as of the last day of the Collection Period of each month, in the Servicer's assigned loan number order to document Revolving Credit Loan payment activity on an individual Revolving Credit Loan basis. With respect to each month, such Report shall be received by the Owner (i) no later than the fifteenth (15^th) calendar day of the month of the related Remittance Date on a disk or tape or other computer-readable format, in such format as may be mutually agreed upon by both the Owner and the Servicer, and (ii) no later than the twentieth (20^th) calendar day of the month of the related Remittance Date in hard copy, which Report shall contain the following:
(i) Additional Balances created during the Collection Period;
(ii) with respect to each Revolving Credit Loan and each Monthly Payment, the amount of such remittance allocable to principal (including a separate breakdown of any Principal Prepayment, including the date of such prepayment, and any prepayment penalties or premiums, along with a detailed report of interest on principal prepayment amounts remitted in accordance with Section 4.04 and any Cancellation Fees);
(iii) with respect to each Revolving Credit Loan and each Monthly Payment, the amount of such remittance allocable to interest;
(iv) with respect to each Revolving Credit Loan, the amount of servicing compensation received by the Servicer during the prior Collection Period;
(v) the Stated Principal Balance of each Revolving Credit Loan and the aggregate Stated Principal Balance of all Revolving Credit Loans as of the first day of the Collection Period and the last day of the Collection Period;
(vi) with respect to each Revolving Credit Loan, the current Mortgage Interest Rate;
(vii) with respect to each Revolving Credit Loan, the aggregate amount of any Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and REO Disposition Proceeds received during the prior Collection Period;
(viii) [Reserved];
(ix) with respect to each Revolving Credit Loan, the Stated Principal Balance of each Revolving Credit Loan (a) delinquent as grouped in the following intervals through final liquidation of such Revolving Credit Loan: 30 to 59 days, 60 to 89 days, 90 days or more; (b) as to which foreclosure has commenced; and (c) as to which REO Property has been acquired;
(x) with respect to each Revolving Credit Loan, and in the aggregate for all Revolving Credit Loans, the amount of any Monthly Advances made by the Servicer during the prior Collection Period;
(xi) with respect to each Revolving Credit Loan, the amount of any Servicing Advances made by the Servicer with respect to such Revolving Credit Loan, and the aggregate amount of Servicing Advances for all Revolving Credit Loans during the prior Collection Period;
(xii) with respect to each Revolving Credit Loan, a description of any Nonrecoverable Advances made by the Servicer with respect to such Revolving Credit Loan including the amount, terms and general purpose of such Nonrecoverable Advances, and the aggregate amount of Nonrecoverable Advances for all Revolving Credit Loans during the prior Collection Period;
(xiii) with respect to any Revolving Credit Loan, a description of any material modifications, extensions or waivers to the terms, fees, penalties or payments of such Revolving Credit Loan during the prior Collection Period or that have cumulatively become material over time;
(xiv) with respect to each Revolving Credit Loan, the Stated Principal Balance of any substitute Revolving Credit Loan provided by the Servicer and the Stated Principal Balance of any Revolving Credit Loan that has been replaced by a substitute Revolving Credit Loan;
(xv) with respect to each Revolving Credit Loan, the Stated Principal Balance of any Revolving Credit Loan that has been repurchased by the Servicer.
For any Revolving Credit Loan in a Pass-Through Transfer, the Servicer shall also furnish the following items in the Report to the Master Servicer, provided that if these items are included in the report to the Owner they need not be incorporated in the Report:
(i) the beginning and ending balances of the Custodial Account and Escrow Account;
(ii) with respect to each Revolving Credit Loan, a description of any Monthly Advances, Servicing Advances and Nonrecoverable Advances reimbursed to the Servicer with respect to such Revolving Credit Loan during the prior Collection Period pursuant to Section 4.05, and the source of funds for such reimbursement, and the aggregate amount of any Monthly Advances, Servicing Advances and Nonrecoverable Advances reimbursed to the Servicer for all Revolving Credit Loans during the prior Collection Period pursuant to Section 4.05; and
In addition, the Servicer shall provide to the Owner such other information known or available to the Servicer that is necessary in order to provide the distribution and pool performance information as required under Item 1121 of Regulation AB, as amended from time to time, as determined by the Owner in its reasonable discretion. Notwithstanding the foregoing, the Servicer shall be under no obligation to provide information that the Owner deems required under Regulation AB if (i) the Servicer does not reasonably believe that such information is required under Regulation AB and (ii) the Servicer is not providing such information for (A) its own securitizations, or (B) any third party securitizations with revolving credit loans serviced by the Servicer, unless the Owner pays all reasonable actual costs incurred by the Servicer in connection with the preparation and delivery of such information and the Servicer is given reasonable time to establish the necessary systems and procedures to produce such information; provided, however, that the costs incurred by the Servicer in connection with establishing the necessary systems and procedures will be split pro rata with any other purchaser that makes a request for similar information.
The Servicer shall also provide a monthly report, in the form of Exhibit E hereto, or such other form as is mutually acceptable to the Servicer, the Owner and any Master Servicer, Exhibit F or such other agreeable format with respect to defaulted revolving credit loans and Exhibit J, with respect to realized losses and gains, with each such report.
The Servicer shall prepare and file any and all information statements or other filings required to be delivered to any governmental taxing authority or to Owner pursuant to any applicable law with respect to the Revolving Credit Loans and the transactions contemplated hereby. In addition, the Servicer shall provide Owner with such information concerning the Revolving Credit Loans as is necessary for Owner to prepare its federal income tax return as Owner may reasonably request from time to time.
10. Article VI of the Agreement is hereby amended effective as of the date hereof by deleting Section 6.04 in its entirety and replacing it with the following:
Section 6.04 Annual Statement as to Compliance; Annual Certification.
(b) With respect to any Revolving Credit Loans that are the subject of a Pass-Through Transfer, using its best efforts to deliver on March 1, but in no event later than March 15, of each calendar year beginning in 2007, an officer of the Servicer shall execute and deliver an Officers’ Certificate (an “Annual Certification”) to the Owner, any Master Servicer and any related Depositor for the benefit of each such entity and such entity’s affiliates and the officers, directors and agents of any such entity and such entity’s affiliates, in the form attached hereto as Exhibit H.
In the event that the Servicer fails to timely comply with this Section 6.04 by March 15th of the related year, the Depositor shall use its commercially reasonable efforts to obtain written or verbal statements or assurances from the Commission, by March 30th of the related year (or such extension of time granted by the Commission so that it can review the facts surrounding any requests made by the Depositor) that such failure to provide the required Annual Statement of Compliance on a timely basis, and a one time additional failure by the Servicer to comply with this Section 6.04, will not result in any adverse effect on the Owner or its affiliates with respect to any Shelf Registration on Form S-3 of the Owner or any of its affiliates. Any costs or expenses incurred by the Depositor in obtaining such statement or assurances from the Commission shall be reimbursed to the Depositor by the Servicer. In the event that the Depositor is unable to receive any such assurances from the Commission after the use of such commercially reasonable efforts by March 30th (or any extension period granted by the Commission) of the related year, such failure by the Servicer to comply with this Section 6.04 shall be deemed an Event of Default, automatically at such time, without notice and without any cure period, and Depositor may, in addition to whatever rights the Depositor may have under Section 8.01, subject to the limitation expressed therein, and at law or equity or to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Servicer under this Agreement and in and to the Revolving Credit Loans and the proceeds thereof without compensating the Servicer for the same, as provided in Section 9.01 . Such termination shall be considered with cause pursuant to Section 10.01 of this Agreement. This paragraph shall supersede any other provision in this Agreement or any other agreement to the contrary.
This indemnification shall survive the termination of this Agreement or the termination of any party to this Agreement.
11. Article VI of the Agreement is hereby amended effective as of the date hereof by deleting Section 6.05 in its entirety and replacing it with the following:
Section 6.05 [Reserved].
12. Article VI of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 6.10:
Section 6.10 Assessment of Compliance with Servicing Criteria.
On and after January 1, 2006, the Servicer shall service and administer, and shall cause each subservicer to servicer or administer, the Revolving Credit Loans in accordance with all applicable requirements of the Servicing Criteria.
With respect to any Revolving Credit Loans that are the subject of a Pass-Through Transfer, the Servicer shall use its best efforts to deliver to the Owner or its designee, any Master Servicer and any Depositor on March 1, but in no event later than March 15 of each calendar year beginning in 2007 a report (an “Assessment of Compliance”) reasonably satisfactory to the Owner, any Master Servicer and any Depositor regarding the Servicer’s assessment of compliance with the Servicing Criteria during the preceding calendar year as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB or as otherwise required by the Master Servicer. Such report shall be addressed to the Owner and such Depositor and signed by an authorized officer of the Servicer, and shall address each of the Servicing Criteria specified on a certification substantially in the form of Exhibit I hereto delivered to the Owner concurrently with the execution of this Agreement.
With respect to any Revolving Credit Loans that are the subject of a Pass-Through Transfer, the Servicer shall use its best efforts to deliver to the Owner or its designee, any Master Servicer and any Depositor on March 1, but in no event later than March 15 of each calendar year beginning in 2007 a report (an “Attestation Report”) by a registered public accounting firm that attests to, and reports on, the Assessment of Compliance made by the Servicer, as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB or as otherwise required by the Master Servicer, which Attestation Report must be made in accordance with standards for attestation reports issued or adopted by the Public Servicer Accounting Oversight Board.
The Servicer shall cause each Subservicer, and each Subcontractor determined by the Servicer pursuant to Section 11.16 to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, to deliver to the Owner, any Master Servicer and any Depositor an assessment of compliance and accountants’ attestation as and when provided in Sections 6.10. Each assessment of compliance provided by a Subservicer shall address each of the Servicing Criteria specified on a certification substantially in the form of Exhibit I hereto delivered to the Owner concurrently with the execution of this Agreement or, in the case of a Subservicer subsequently appointed as such, on or prior to the date of such appointment.
In the event that the Servicer fails to timely comply with this Section 6.10 by March 15th of the related year, the Depositor shall use its commercially reasonable efforts to obtain written or verbal statements or assurances from the Commission, by March 30th of the related year (or such extension of time granted by the Commission so that it can review the facts surrounding any requests made by the Depositor) that such failure to provide the required Assessment of Compliance and Attestation Report on a timely basis, and a one time additional failure by the Servicer to comply with this Section 6.10, will not result in any adverse effect on the Depositor or its affiliates with respect to any Shelf Registration on Form S-3 of the Depositor or any of its affiliates. Any costs or expenses incurred by the Depositor in obtaining such statement or assurances from the Commission shall be reimbursed to the Depositor by the Servicer. In the event that the Depositor is unable to receive any such assurances from the Commission after the use of such commercially reasonable efforts by March 30th (or any extension period granted by the Commission) of the related year, such failure by the Servicer to comply with this Section 6.10 shall be deemed an Event of Default, automatically at such time, without notice and without any cure period, and Depositor may, in addition to whatever rights the Depositor may have under Section 8.01, subject to the limitation expressed therein, and at law or equity or to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Servicer under this Agreement and in and to the Revolving Credit Loans and the proceeds thereof without compensating the Servicer for the same, as provided in Section 9.01 . Such termination shall be considered with cause pursuant to Section 10.01 of this Agreement. This paragraph shall supersede any other provision in this Agreement or any other agreement to the contrary.
This indemnification shall survive the termination of this Agreement or the termination of any party to this Agreement.
13. Article VI of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 6.11:
Section 6.11 Intent of the Parties; Reasonableness.
The Owner and the Servicer acknowledge and agree that a purpose of Section 3.01(i), 4.14, Sections 5.02, 6.04, 6.10 and 10.02 of this Agreement is to facilitate compliance by the Owner and any Depositor with the provisions of Regulation AB and related rules and regulations of the Commission. None of the Owner, any Master Servicer or any Depositor shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder. The Servicer acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with requests made by the Owner or any Depositor in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB. In connection with any Pass-Through Transfer, the Servicer shall cooperate fully with the Owner to deliver to the Owner (including any of its assignees or designees) and any Depositor, any and all statements, reports, certifications, records and any other information necessary in the good faith determination of the Owner or any Depositor to permit the Owner or such Depositor to comply with the provisions of Regulation AB, together with such disclosures relating to the Servicer, any Subservicer, any Third-Party Originator and the Revolving Credit Loans, or the servicing of the Revolving Credit Loans, reasonably believed by the Owner or any Depositor to be necessary in order to effect such compliance.
then, and in each and every such case, so long as an Event of Default shall not have been remedied, the Owner, by notice in writing to the Servicer (or as otherwise stated herein, in which case, automatically and without notice) may, in addition to whatever rights the Owner may have under Section 8.01, subject to the limitation expressed therein, and at law or equity to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Servicer (and if the Servicer is servicing any of the Revolving Credit Loans in a Securitization Transaction, appoint a successor servicer reasonably acceptable to any Master Servicer for such Securitization Transaction) under this Agreement and in and to the Revolving Credit Loans and the proceeds thereof without compensating the Servicer for the same. On or after the receipt by the Servicer of such written notice, all authority and power of the Servicer under this Agreement, whether with respect to the Revolving Credit Loans or otherwise, shall pass to and be vested in the successor appointed pursuant to Section 11.01. Upon written request from the Owner, the Servicer shall prepare, execute and deliver, any and all documents and other instruments, place in such successor's possession all Servicing Files, and do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Revolving Credit Loans and related documents, or otherwise, at the Servicer's sole expense. The Servicer agrees to cooperate with the Owner and such successor in effecting the termination of the Servicer's responsibilities and rights hereunder, including, without limitation, the transfer to such successor for administration by it of all cash amounts which shall at the time be credited by the Servicer to the Custodial Account or Escrow Account or thereafter received with respect to the Revolving Credit Loans or any REO Property.
15. Article IX of the Agreement is hereby amended effective as of the date hereof by adding the following at the end of the last paragraph of Section 9.01:
The Servicer shall promptly reimburse the Owner (or any designee of the Owner, such as a Master Servicer) and any Depositor, as applicable, for all reasonable expenses incurred by the Owner (or such designee) or such Depositor, as such are incurred, in connection with the termination of the Servicer as servicer and the transfer of servicing of the Revolving Credit Loans to a successor servicer. The provisions of this paragraph shall not limit whatever rights the Owner or any Depositor may have under other provisions of this Agreement and/or any applicable Reconstitution Agreement or otherwise, whether in equity or at law, such as an action for damages, specific performance or injunctive relief.
16. Article X of the Agreement is hereby amended effective as of the date hereof by restating Section 10.02 in its entirety as follows:
Section 10.02. Cooperation of Servicer with a Reconstitution.
The Servicer and the Owner agree that with respect to some or all of the Revolving Credit Loans, on or after the related closing date, on one or more dates (each a “Reconstitution Date”) at the Owner’s sole option, the Owner may effect a sale (each, a “Reconstitution”) of some or all of the Revolving Credit Loans then subject to this Agreement, without recourse, to:
(1) one or more third party purchasers in one or more in whole loan transfers (each, a “Whole Loan Transfer”); or
(2) one or more trusts or other entities to be formed as part of one or more Pass-Through Transfers.
With respect to each Whole Loan Transfer or Pass-Through Transfer, as the case may be, the Servicer shall (i) following request by the Owner or any Depositor, use best efforts to provide within five, and in no event later than seven Business Days the Owner and such Depositor (or, as applicable, cause each Subservicer to provide), in writing and in form and substance reasonably satisfactory to the Owner and such Depositor, the information and materials specified in paragraphs (a) and (b) of this Section, and (ii) as promptly as practicable following notice to or discovery by the Servicer, provide to the Owner and any Depositor (in writing and in form and substance reasonably satisfactory to the Owner and such Depositor) the information specified in paragraph (b) of this Section.
(a) If so requested by the Owner or any Depositor, the Servicer shall provide such information regarding the Servicer, as servicer of the Revolving Credit Loans, and each Subservicer (each of the Servicer and each Subservicer, for purposes of this clause (a), a “Servicer”), as is requested for the purpose of compliance with Item 1108 of Regulation AB. Such information shall include, at a minimum:
(1) the Servicer’s form of organization;
(2) a description of how long the Servicer has been servicing revolving credit loans; a general discussion of the Servicer’s experience in servicing assets of any type as well as a more detailed discussion of the Servicer’s experience in, and procedures for, the servicing function it will perform under this Agreement and any Reconstitution Agreements; information regarding the size, composition and growth of the Servicer’s portfolio of revolving credit loans of a type similar to the Revolving Credit Loans and information on factors related to the Servicer that may be material, in the good faith judgment of the Owner or any Depositor, to any analysis of the servicing of the Revolving Credit Loans or the related asset-backed securities, as applicable, including, without limitation:
(i) whether any prior securitizations of revolving credit loans of a type similar to the Revolving Credit Loans involving the Servicer have defaulted or experienced an early amortization or other performance triggering event because of servicing during the three-year period immediately preceding the related Securitization Transaction;
(ii) the extent of outsourcing the Servicer utilizes;
(iii) whether there has been previous disclosure of material noncompliance with the applicable servicing criteria with respect to other securitizations of revolving credit loans involving the Servicer as a servicer during the three-year period immediately preceding the related Securitization Transaction;
(iv) whether the Servicer has been terminated as servicer in a securitization, either due to a servicing default or to application of a servicing performance test or trigger; and
(v) such other information as the Owner or any Depositor may reasonably request for the purpose of compliance with Item 1108(b)(2) of Regulation AB;
(3) a description of any material changes during the three-year period immediately preceding the related Securitization Transaction to the Servicer’s policies or procedures with respect to the servicing function it will perform under this Agreement and any Reconstitution Agreements for loans of a type similar to the Revolving Credit Loans;
(5) [Reserved];
(6) a description of the Servicer’s processes and procedures designed to address any special or unique factors involved in servicing loans of a similar type as the Revolving Credit Loans;
(7) a description of the Servicer’s processes for handling delinquencies, losses, bankruptcies and recoveries, such as through liquidation of revolving credit loans, sale of defaulted loans or workouts; and
(b) For the purpose of satisfying its reporting obligation under the Exchange Act with respect to any class of asset-backed securities, the Servicer shall (or shall cause each Subservicer to) (i) notify the Owner, any Master Servicer and any Depositor in writing of (A) any material litigation or governmental proceedings involving the Servicer or any Subservicer, (B) any affiliations or relationships that develop following the closing date of a Securitization Transaction between the Servicer or any Subservicer and any of the parties specified in clause (7) of paragraph (i) of Section 3.01 (and any other parties identified in writing by the requesting party) with respect to such Securitization Transaction, (C) any Event of Default under the terms of this Agreement or any reconstitution agreement, (D) any merger, consolidation or sale of substantially all of the assets of the Servicer, and (E) the Servicer’s entry into an agreement with a Subservicer to perform or assist in the performance of any of the Servicer’s obligations under this Agreement or any reconstitution agreement and (ii) provide to the Owner and any Depositor a description of such proceedings, affiliations or relationships.
As a condition to the succession to the Servicer or any Subservicer as servicer or subservicer under this Agreement or any Reconstitution Agreement by any Person (i) into which the Servicer or such Subservicer may be merged or consolidated, or (ii) which may be appointed as a successor to the Servicer or any Subservicer, the Servicer shall provide to the Owner, any Master Servicer, and any Depositor, at least 15 calendar days prior to the effective date of such succession or appointment, (x) written notice to the Owner, any Master Servicer and any Depositor of such succession or appointment and (y) in writing and in form and substance reasonably satisfactory to the Owner, any Master Servicer and such Depositor, all information reasonably requested by the Owner, any Master Servicer or any Depositor in order to comply with its reporting obligation under Item 6.02 of Form 8-K with respect to any class of asset-backed securities;
In addition to such information as the Servicer is obligated to provide pursuant to other provisions of this Agreement, not later than ten days prior to the deadline for the filing of any distribution report on Form 10-D in respect of any Securitization Transaction that includes any of the Revolving Credit Loans serviced by the Servicer or any Subservicer, the Servicer or such Subservicer, as applicable, shall, to the extent the Servicer or such Subservicer has knowledge, provide to the party responsible for filing such report (including, if applicable, the Master Servicer) notice of the occurrence of any of the following events along with all information, data, and materials related thereto as may be required to be included in the related distribution report on Form 10-D (as specified in the provisions of Regulation AB referenced below):
(A) any material modifications, extensions or waivers of pool asset terms, fees, penalties or payments during the Collection Period or that have cumulatively become material over time (Item 1121(a)(11) of Regulation AB);
(B) material breaches of pool asset representations or warranties or transaction covenants (Item 1121(a)(12) of Regulation AB); and
The Servicer shall provide to the Owner, any Master Servicer and any Depositor, evidence of the authorization of the person signing any certification or statement, copies or other evidence of Fidelity Bond Insurance and Errors and Omission Insurance policy, financial information and reports, and such other information related to the Servicer or any Subservicer or the Servicer or such Subservicer’s performance hereunder.
Notwithstanding the foregoing, the Servicer shall be under no obligation to provide information that the Owner deems required under Regulation AB if (i) the Servicer does not reasonably believe that such information is required under Regulation AB and (ii) the Servicer is not providing such information for (A) its own securitizations, or (B) any third party securitizations with loans serviced by the Servicer, unless the Owner pays all reasonable actual costs incurred by the Servicer in connection with the preparation and delivery of such information and the Servicer is given reasonable time to establish the necessary systems and procedures to produce such information; provided, however, that the costs incurred by the Servicer in connection with establishing the necessary systems and procedures will be split pro rata with any other purchaser that makes a request for similar information.
All Revolving Credit Loans not sold or transferred pursuant to a Reconstitution shall remain subject to, and serviced in accordance with the terms of, this Agreement and the related Term Sheet, and with respect thereto this Agreement and the related Term Sheet shall remain in full force and effect.
17. Article XI of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 11.17:
Section 11.16. Use of Subservicers and Subcontractors.
(b) It shall not be necessary for the Servicer to seek the consent of the Owner to the utilization of any subservicer. The Servicer shall cause any Subservicer used by the Servicer (or by any Subservicer) for the benefit of the Owner and any Depositor to comply with the provisions of this Section and with Sections 3.01(i), 4.14, 6.04, 6.10 and 10.02 of this Agreement to the same extent as if such Subservicer were the Servicer, and to provide the information required with respect to such Subservicer under Section 3.02(b) of this Agreement. The Servicer shall be responsible for obtaining from each Subservicer and delivering to the Owner, any Master Servicer and any Depositor any Annual Statement of Compliance required to be delivered by such Subservicer under Section 6.04(a), any Assessment of Compliance and Attestation Report required to be delivered by such Subservicer under Section 6.10 and any Annual Certification required under Section 6.04(b) as and when required to be delivered.
(d) As a condition to the utilization of any Subcontractor determined to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, the Servicer shall cause any such Subcontractor used by the Servicer (or by any Subservicer) for the benefit of the Owner and any Depositor to comply with the provisions of Sections 6.10 and 10.02 of this Agreement to the same extent as if such Subcontractor were the Servicer. The Servicer shall be responsible for obtaining from each Subcontractor and delivering to the Owner and any Depositor any Assessment of Compliance and Attestation Report and the other certificates required to be delivered by such Subservicer and such Subcontractor under Section 6.10, in each case as and when required to be delivered.
18. Article XI of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 11.18:
Section 11.18 [Reserved]
19. The Agreement is hereby amended effective as of the date hereof by deleting Exhibit E in its entirety and replacing it with the following:
EXHIBIT E
REPORTING DATA FOR MONTHLY REPORT
Standard File Layout - Master Servicing
Column Name	Description	Decimal	Format Comment	Max Size
SER_INVESTOR_NBR	A value assigned by the Servicer to define a group of loans.		Text up to 10 digits	20
LOAN_NBR	A unique identifier assigned to each loan by the investor.		Text up to 10 digits	10
SERVICER_LOAN_NBR	A unique number assigned to a loan by the Servicer. This may be different than the LOAN_NBR.		Text up to 10 digits	10
BORROWER_NAME	The borrower name as received in the file. It is not separated by first and last name.		Maximum length of 30 (Last, First)	30
SCHED_PAY_AMT	Scheduled monthly principal and scheduled interest payment that a borrower is expected to pay, P&I constant.	2	No commas(,) or dollar signs ($)	11
NOTE_INT_RATE	The loan interest rate as reported by the Servicer.	4	Max length of 6	6
NET_INT_RATE	The loan gross interest rate less the service fee rate as reported by the Servicer.	4	Max length of 6	6
SERV_FEE_RATE	The servicer's fee rate for a loan as reported by the Servicer.	4	Max length of 6	6
SERV_FEE_AMT	The servicer's fee amount for a loan as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11
NEW_PAY_AMT	The new loan payment amount as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11
NEW_LOAN_RATE	The new loan rate as reported by the Servicer.	4	Max length of 6	6
ARM_INDEX_RATE	The index the Servicer is using to calculate a forecasted rate.	4	Max length of 6	6
ACTL_BEG_PRIN_BAL	The borrower's actual principal balance at the beginning of the processing cycle.	2	No commas(,) or dollar signs ($)	11
ACTL_END_PRIN_BAL	The borrower's actual principal balance at the end of the processing cycle.	2	No commas(,) or dollar signs ($)	11
BORR_NEXT_PAY_DUE_DATE	The date at the end of processing cycle that the borrower's next payment is due to the Servicer, as reported by Servicer.		MM/DD/YYYY	10
SERV_CURT_AMT_1	The first curtailment amount to be applied.	2	No commas(,) or dollar signs ($)	11
SERV_CURT_DATE_1	The curtailment date associated with the first curtailment amount.		MM/DD/YYYY	10
CURT_ADJ_ AMT_1	The curtailment interest on the first curtailment amount, if applicable.	2	No commas(,) or dollar signs ($)	11
SERV_CURT_AMT_2	The second curtailment amount to be applied.	2	No commas(,) or dollar signs ($)	11
SERV_CURT_DATE_2	The curtailment date associated with the second curtailment amount.		MM/DD/YYYY	10
CURT_ADJ_ AMT_2	The curtailment interest on the second curtailment amount, if applicable.	2	No commas(,) or dollar signs ($)	11
SERV_CURT_AMT_3	The third curtailment amount to be applied.	2	No commas(,) or dollar signs ($)	11
SERV_CURT_DATE_3	The curtailment date associated with the third curtailment amount.		MM/DD/YYYY	10
CURT_ADJ_AMT_3	The curtailment interest on the third curtailment amount, if applicable.	2	No commas(,) or dollar signs ($)	11
PIF_AMT	The loan "paid in full" amount as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11
PIF_DATE	The paid in full date as reported by the Servicer.		MM/DD/YYYY	10
ACTION_CODE	The standard FNMA numeric code used to indicate the default/delinquent status of a particular loan.		Action Code Key: 15=Bankruptcy, 30=Foreclosure, 60=PIF, 63=Substitution, 65=Repurchase, 70=REO	2
INT_ADJ_AMT	The amount of the interest adjustment as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11
SOLDIER_SAILOR_ADJ_AMT	The Soldier and Sailor Adjustment amount, if applicable.	2	No commas(,) or dollar signs ($)	11
NON_ADV_LOAN_AMT	The Non Recoverable Loan Amount, if applicable.	2	No commas(,) or dollar signs ($)	11
LOAN_LOSS_AMT	The amount the Servicer is passing as a loss, if applicable.	2	No commas(,) or dollar signs ($)	11
SCHED_BEG_PRIN_BAL	The scheduled outstanding principal amount due at the beginning of the cycle date to be passed through to investors.	2	No commas(,) or dollar signs ($)	11
SCHED_END_PRIN_BAL	The scheduled principal balance due to investors at the end of a processing cycle.	2	No commas(,) or dollar signs ($)	11
SCHED_PRIN_AMT	The scheduled principal amount as reported by the Servicer for the current cycle -- only applicable for Scheduled/Scheduled Loans.	2	No commas(,) or dollar signs ($)	11
SCHED_NET_INT	The scheduled gross interest amount less the service fee amount for the current cycle as reported by the Servicer -- only applicable for Scheduled/Scheduled Loans.	2	No commas(,) or dollar signs ($)	11
ACTL_PRIN_AMT	The actual principal amount collected by the Servicer for the current reporting cycle -- only applicable for Actual/Actual Loans.	2	No commas(,) or dollar signs ($)	11
ACTL_NET_INT	The actual gross interest amount less the service fee amount for the current reporting cycle as reported by the Servicer -- only applicable for Actual/Actual Loans.	2	No commas(,) or dollar signs ($)	11
PREPAY_PENALTY_ AMT	The penalty amount received when a borrower prepays on his loan as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11
PREPAY_PENALTY_ WAIVED	The prepayment penalty amount for the loan waived by the servicer.	2	No commas(,) or dollar signs ($)	11
MOD_DATE	The Effective Payment Date of the Modification for the loan.		MM/DD/YYYY	10
MOD_TYPE	The Modification Type.		Varchar - value can be alpha or numeric	30
DELINQ_P&I_ADVANCE_AMT	The current outstanding principal and interest advances made by Servicer.	2	No commas(,) or dollar signs ($)	11
20. The Agreement is hereby amended effective as of the date hereof by adding the following new Exhibit H:
EXHIBIT H
FORM OF SERVICER CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the “Agreement”), among [IDENTIFY PARTIES]
I have reviewed the servicer compliance statement of the Company provided in accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the report on assessment of the Company’s compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing Assessment”), the registered public accounting firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all servicing reports, officer’s certificates and other information relating to the servicing of the Revolving Credit Loans by the Company during 200[ ] that were delivered by the Company to the [Depositor] [Master Servicer] [Securities Administrator] [Trustee] pursuant to the Agreement (collectively, the “Company Servicing Information”);
21. The Agreement is hereby amended effective as of the date hereof by adding the following new Exhibit I:
EXHIBIT I
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Servicer] [Name of Subservicer] shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria”:
*Servicing Criteria*		*Applicable Servicing Criteria*
Reference	Criteria
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	X
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.	X
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.	X
	Cash Collection and Administration
1122(d)(2)(i)	Payments on mortgage loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.	X
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	X
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.	X
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	X
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	X
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.	X
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.	X
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of mortgage loans serviced by the Servicer.	X
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	X
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.	X
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	X
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on mortgage loans is maintained as required by the transaction agreements or related mortgage loan documents.	X
1122(d)(4)(ii)	Mortgage loan and related documents are safeguarded as required by the transaction agreements	X
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	X
1122(d)(4)(iv)	Payments on mortgage loans, including any payoffs, made in accordance with the related mortgage loan documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related mortgage loan documents.	X
1122(d)(4)(v)	The Servicer’s records regarding the mortgage loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	X
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor's mortgage loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.	X
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	X
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a mortgage loan is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent mortgage loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	X
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for mortgage loans with variable rates are computed based on the related mortgage loan documents.	X
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s mortgage loan documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable mortgage loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related mortgage loans, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.	X
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.	X
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.	X
[NAME OF COMPANY] [NAME OF SUBSERVICER]
Date:
By:
Name:
Title:
22. The Agreement is hereby amended effective as of the date hereof by deleting Exhibit F in its entirety and replacing it with the following:
EXHIBIT F
REPORTING DATA FOR DEFAULTED LOANS
Standard File Layout - Delinquency Reporting
Column/Header Name	Description	Decimal	Format Comment
SERVICER_LOAN_NBR	A unique number assigned to a loan by the Servicer. This may be different than the LOAN_NBR
LOAN_NBR	A unique identifier assigned to each loan by the originator.
CLIENT_NBR	Servicer Client Number
SERV_INVESTOR_NBR	Contains a unique number as assigned by an external servicer to identify a group of loans in their system.
BORROWER_FIRST_NAME	First Name of the Borrower.
BORROWER_LAST_NAME	Last name of the borrower.
PROP_ADDRESS	Street Name and Number of Property
PROP_STATE	The state where the property located.
PROP_ZIP	Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE	The date that the borrower's next payment is due to the servicer at the end of processing cycle, as reported by Servicer.		MM/DD/YYYY
LOAN_TYPE	Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE	The date a particular bankruptcy claim was filed.		MM/DD/YYYY
BANKRUPTCY_CHAPTER_CODE	The chapter under which the bankruptcy was filed.
BANKRUPTCY_CASE_NBR	The case number assigned by the court to the bankruptcy filing.
POST_PETITION_DUE_DATE	The payment due date once the bankruptcy has been approved by the courts		MM/DD/YYYY
BANKRUPTCY_DCHRG_DISM_DATE	The Date The Loan Is Removed From Bankruptcy. Either by Dismissal, Discharged and/or a Motion For Relief Was Granted.		MM/DD/YYYY
LOSS_MIT_APPR_DATE	The Date The Loss Mitigation Was Approved By The Servicer		MM/DD/YYYY
LOSS_MIT_TYPE	The Type Of Loss Mitigation Approved For A Loan Such As;
LOSS_MIT_EST_COMP_DATE	The Date The Loss Mitigation /Plan Is Scheduled To End/Close		MM/DD/YYYY
LOSS_MIT_ACT_COMP_DATE	The Date The Loss Mitigation Is Actually Completed		MM/DD/YYYY
FRCLSR_APPROVED_DATE	The date DA Admin sends a letter to the servicer with instructions to begin foreclosure proceedings.		MM/DD/YYYY
ATTORNEY_REFERRAL_DATE	Date File Was Referred To Attorney to Pursue Foreclosure		MM/DD/YYYY
FIRST_LEGAL_DATE	Notice of 1st legal filed by an Attorney in a Foreclosure Action		MM/DD/YYYY
FRCLSR_SALE_EXPECTED_DATE	The date by which a foreclosure sale is expected to occur.		MM/DD/YYYY
FRCLSR_SALE_DATE	The actual date of the foreclosure sale.		MM/DD/YYYY
FRCLSR_SALE_AMT	The amount a property sold for at the foreclosure sale.	2	No commas(,) or dollar signs ($)
EVICTION_START_DATE	The date the servicer initiates eviction of the borrower.		MM/DD/YYYY
EVICTION_COMPLETED_DATE	The date the court revokes legal possession of the property from the borrower.		MM/DD/YYYY
LIST_PRICE	The price at which an REO property is marketed.	2	No commas(,) or dollar signs ($)
LIST_DATE	The date an REO property is listed at a particular price.		MM/DD/YYYY
OFFER_AMT	The dollar value of an offer for an REO property.	2	No commas(,) or dollar signs ($)
OFFER_DATE_TIME	The date an offer is received by DA Admin or by the Servicer.		MM/DD/YYYY
REO_CLOSING_DATE	The date the REO sale of the property is scheduled to close.		MM/DD/YYYY
REO_ACTUAL_CLOSING_DATE	Actual Date Of REO Sale		MM/DD/YYYY
OCCUPANT_CODE	Classification of how the property is occupied.
PROP_CONDITION_CODE	A code that indicates the condition of the property.
PROP_INSPECTION_DATE	The date a property inspection is performed.		MM/DD/YYYY
APPRAISAL_DATE	The date the appraisal was done.		MM/DD/YYYY
CURR_PROP_VAL	The current "as is" value of the property based on brokers price opinion or appraisal.	2
REPAIRED_PROP_VAL	The amount the property would be worth if repairs are completed pursuant to a broker's price opinion or appraisal.	2
If applicable:
DELINQ_STATUS_CODE	FNMA Code Describing Status of Loan
DELINQ_REASON_CODE	The circumstances which caused a borrower to stop paying on a loan. Code indicates the reason why the loan is in default for this cycle.
MI_CLAIM_FILED_DATE	Date Mortgage Insurance Claim Was Filed With Mortgage Insurance Company.		MM/DD/YYYY
MI_CLAIM_AMT	Amount of Mortgage Insurance Claim Filed		No commas(,) or dollar signs ($)
MI_CLAIM_PAID_DATE	Date Mortgage Insurance Company Disbursed Claim Payment		MM/DD/YYYY
MI_CLAIM_AMT_PAID	Amount Mortgage Insurance Company Paid On Claim	2	No commas(,) or dollar signs ($)
POOL_CLAIM_FILED_DATE	Date Claim Was Filed With Pool Insurance Company		MM/DD/YYYY
POOL_CLAIM_AMT	Amount of Claim Filed With Pool Insurance Company	2	No commas(,) or dollar signs ($)
POOL_CLAIM_PAID_DATE	Date Claim Was Settled and The Check Was Issued By The Pool Insurer		MM/DD/YYYY
POOL_CLAIM_AMT_PAID	Amount Paid On Claim By Pool Insurance Company	2	No commas(,) or dollar signs ($)
FHA_PART_A_CLAIM_FILED_DATE	Date FHA Part A Claim Was Filed With HUD		MM/DD/YYYY
FHA_PART_A_CLAIM_AMT	Amount of FHA Part A Claim Filed	2	No commas(,) or dollar signs ($)
FHA_PART_A_CLAIM_PAID_DATE	Date HUD Disbursed Part A Claim Payment		MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT	Amount HUD Paid on Part A Claim	2	No commas(,) or dollar signs ($)
FHA_PART_B_CLAIM_FILED_DATE	Date FHA Part B Claim Was Filed With HUD		MM/DD/YYYY
FHA_PART_B_CLAIM_AMT	Amount of FHA Part B Claim Filed	2	No commas(,) or dollar signs ($)
FHA_PART_B_CLAIM_PAID_DATE	Date HUD Disbursed Part B Claim Payment		MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT	Amount HUD Paid on Part B Claim	2	No commas(,) or dollar signs ($)
VA_CLAIM_FILED_DATE	Date VA Claim Was Filed With the Veterans Admin		MM/DD/YYYY
VA_CLAIM_PAID_DATE	Date Veterans Admin. Disbursed VA Claim Payment		MM/DD/YYYY
VA_CLAIM_PAID_AMT	Amount Veterans Admin. Paid on VA Claim	2	No commas(,) or dollar signs ($)
Exhibit 2: Standard File Codes - Delinquency Reporting
The Loss Mit Type field should show the approved Loss Mitigation Code as follows:
·	ASUM-Approved Assumption
·	BAP-Borrower Assistance Program
·	CO- Charge Off
·	DIL- Deed-in-Lieu
·	FFA- Formal Forbearance Agreement
·	MOD- Loan Modification
·	PRE- Pre-Sale
·	SS- Short Sale
·	MISC-Anything else approved by the PMI or Pool Insurer
The Occupant Code field should show the current status of the property code as follows:
Mortgagor
Tenant
Unknown
Vacant
The Property Condition field should show the last reported condition of the property as follows:
Damaged
Excellent
Fair
Gone
Good
Poor
·	Special Hazard
Unknown
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as follows:
Delinquency Code	Delinquency Description
001	FNMA-Death of principal mortgagor
002	FNMA-Illness of principal mortgagor
003	FNMA-Illness of mortgagor’s family member
004	FNMA-Death of mortgagor’s family member
005	FNMA-Marital difficulties
006	FNMA-Curtailment of income
007	FNMA-Excessive Obligation
008	FNMA-Abandonment of property
009	FNMA-Distant employee transfer
011	FNMA-Property problem
012	FNMA-Inability to sell property
013	FNMA-Inability to rent property
014	FNMA-Military Service
015	FNMA-Other
016	FNMA-Unemployment
017	FNMA-Business failure
019	FNMA-Casualty loss
022	FNMA-Energy environment costs
023	FNMA-Servicing problems
026	FNMA-Payment adjustment
027	FNMA-Payment dispute
029	FNMA-Transfer of ownership pending
030	FNMA-Fraud
031	FNMA-Unable to contact borrower
INC	FNMA-Incarceration
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Status Code field should show the Status of Default as follows:
Status Code	Status Description
09	Forbearance
17	Pre-foreclosure Sale Closing Plan Accepted
24	Government Seizure
26	Refinance
27	Assumption
28	Modification
29	Charge-Off
30	Third Party Sale
31	Probate
32	Military Indulgence
43	Foreclosure Started
44	Deed-in-Lieu Started
49	Assignment Completed
61	Second Lien Considerations
62	Veteran’s Affairs-No Bid
63	Veteran’s Affairs-Refund
64	Veteran’s Affairs-Buydown
65	Chapter 7 Bankruptcy
66	Chapter 11 Bankruptcy
67	Chapter 13 Bankruptcy
23. The Agreement is hereby amended effective as of the date hereof by adding the following new Exhibit J:
EXHIBIT J
REPORTING DATA FOR REALIZED LOSSES AND GAINS
Calculation of Realized Loss/Gain Form 332- Instruction Sheet
The numbers on the 332 form correspond with the numbers listed below.
Liquidation and Acquisition Expenses:
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form - breakdown required showing period of coverage, base tax, interest, penalty. Advances prior to default require evidence of servicer efforts to recover advances.
* For escrow advances - complete payment history (to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and WFB’s approved Officer Certificate
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
Credits:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3^rd Party Sale, bid instructions and Escrow Agent / Attorney Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial proceeds and line (18b) for Part B/Supplemental proceeds.
Total Realized Loss (or Amount of Any Gain)
23. The total derived from subtracting line 22 from 13. If the amount represents a realized gain, show the amount in parenthesis ( ).
Calculation of Realized Loss/Gain Form 332
	Prepared by:					Date:

	Phone:					Email Address:
Servicer Loan No.
Servicer Name
Servicer Address
WELLS FARGO BANK, N.A. Loan No._____________________________
Borrower's Name: _________________________________________________________
Property Address: _________________________________________________________
Liquidation Type: REO Sale 3^rd Party Sale Short Sale Charge Off
Was this loan granted a Bankruptcy deficiency or cramdown Yes No
If “Yes”, provide deficiency or cramdown amount _______________________________
Liquidation and Acquisition Expenses:
(1)	Actual Unpaid Principal Balance of Mortgage Loan	$ __ ____________	(1)
(2)	Interest accrued at Net Rate	________________	(2)
(3)	Accrued Servicing Fees	________________	(3)
(4)	Attorney's Fees	________________	(4)
(5)	Taxes (see page 2)	________________	(5)
(6)	Property Maintenance	________________	(6)
(7)	MI/Hazard Insurance Premiums (see page 2)	________________	(7)
(8)	Utility Expenses	________________	(8)
(9)	Appraisal/BPO	________________	(9)
(10)	Property Inspections	________________	(10)
(11)	FC Costs/Other Legal Expenses	________________	(11)
(12)	Other (itemize)	________________	(12)
	Cash for Keys__________________________	________________	(12)
	HOA/Condo Fees_______________________	________________	(12)
	_____________________________________	________________	(12)

	Total Expenses	$ _______________	(13)
Credits:
(14)	Escrow Balance	$ _______________	(14)
(15)	HIP Refund	________________	(15)
(16)	Rental Receipts	________________	(16)
(17)	Hazard Loss Proceeds	________________	(17)
(18)	Primary Mortgage Insurance / Gov’t Insurance	________________	(18a)
HUD Part A		________________	(18b)
HUD Part B
(19)	Pool Insurance Proceeds	________________	(19)
(20)	Proceeds from Sale of Acquired Property	________________	(20)
(21)	Other (itemize)	________________	(21)
	_________________________________________	________________	(21)

	Total Credits	$________________	(22)
Total Realized Loss (or Amount of Gain)		$________________	(23)
Escrow Disbursement Detail
Type (Tax /Ins.)	Date Paid	Period of Coverage	Total Paid	Base Amount	Penalties	Interest
24. Except as amended above, the Agreement shall continue to be in full force and effect in accordance with its terms.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the following parties have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.
EMC MORTGAGE CORPORATION,
as Owner
By:
Name:
Title:
GMAC MORTGAGE CORPORATION,
as Servicer
By:
Name:
Title:
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This Assignment, Assumption and Recognition Agreement (the “AAR Agreement”) is made and entered into as of April 30, 2007 (the “Closing Date”), among EMC Mortgage Corporation (the “Assignor”), Citibank, N.A. (the “Assignee”), not individually but solely as indenture trustee (the “Indenture Trustee”) for the holders of Bear Stearns Second Lien Trust 2007-1, Mortgage-Backed Notes, Series 2007-1, Bear Stearns Asset Backed Securities I LLC (“BSABS I”) and GMAC Mortgage, LLC (the “Company”).
Whereas, the Assignor and the Company entered into that certain Servicing Agreement, dated as of August 1, 2005 and the Amended and Restated Amendment Number One, dated as of February 1, 2006 (the “Servicing Agreement”), pursuant to which the Company agrees to service the Revolving Credit Loans.
In consideration of the mutual promises and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Revolving Credit Loans listed on Attachment 1 annexed hereto (the “Assigned Loans”) shall be subject to the terms of this AAR Agreement. Any capitalized term used and not otherwise defined herein shall have the meaning assigned to such term in the Servicing Agreement.
Assignment and Assumption
1. Except as expressly provided for herein, the Assignor hereby grants, transfers and assigns to the Assignee all of its right, title and interest in, to and under (a) the Assigned Loans and (b) as it relates to the Assigned Loans, the Servicing Agreement. Notwithstanding anything to the contrary contained herein, the Assignor is not assigning to the Assignee any of its right, title and interest in, to and under the Servicing Agreement with respect to any other revolving credit loan other than the Assigned Loans. Except as is otherwise expressly provided herein, the Assignor makes no representations, warranties or covenants to the Assignee and the Assignee acknowledges that the Assignor has no obligations to the Assignee under the terms of the Servicing Agreement or otherwise relating to the transaction contemplated herein (including, but not limited to, any obligation to indemnify the Assignee). The Assignor specifically reserves and does not assign to the Assignee its obligation to reimburse the Company for the amount of any Additional Balances created on or after the related Cut-off Date under the Servicing Agreement. The Assignor specifically reserves and does not assign to the Assignee its obligation, as set forth in (i) the second sentence of the fourth to last paragraph of Section 5.02 of the Servicing Agreement, (ii) the last paragraph of Section 6.11 of the Servicing Agreement and (iii) the second to last paragraph of Section 10.02(b) of the Servicing Agreement. The Assignor hereby agrees to pay the Company the amount of any Additional Balances transferred to Assignor under the Servicing Agreement in accordance with Section 5.01 of the Servicing Agreement. The Assignee shall have no obligation to fund any Additional Balances created and transferred to the Assignor under the Servicing Agreement.
Representations, Warranties and Covenants
2. Assignor warrants and represents to, and covenants with, Assignee, Company and the Note Insurer as of the date hereof that:
(a) Attached hereto as Attachment 2 is a true and correct copy of the Servicing Agreement, which Servicing Agreement is in full force and effect as of the date hereof and the provisions of which have not been waived, amended or modified in any respect, nor has any notice of termination been given thereunder;
(b) Assignor is the lawful owner of the Assigned Loans with full right to transfer the Assigned Loans and any and all of its interests, rights and obligations under the Servicing Agreement as they relate to the Assigned Loans, free and clear from any and all claims and encumbrances; and upon the transfer of the Assigned Loans to Assignee as contemplated herein, Assignee shall have good title to each and every Assigned Loan, as well as any and all of Assignee’s interests, rights and obligations under the Servicing Agreement as they relate to the Assigned Loans, free and clear of any and all liens, claims and encumbrances;
(c) There are no offsets, counterclaims or other defenses available to the Company with respect to the Assigned Loans or the Servicing Agreement;
(d) Assignor has no knowledge of, and has not received notice of, any waivers under, or any modification of, any Assigned Loan;
(e) Assignor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite power and authority to acquire, own and sell the Assigned Loans;
(f) Assignor has full corporate power and authority to execute, deliver and perform its obligations under this AAR Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this AAR Agreement is in the ordinary course of Assignor’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of Assignor’s charter or by-laws or any legal restriction, or any material agreement or instrument to which Assignor is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which Assignor or its property is subject. The execution, delivery and performance by Assignor of this AAR Agreement and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on part of Assignor. This AAR Agreement has been duly executed and delivered by Assignor and, upon the due authorization, execution and delivery by Assignee and the parties hereto, will constitute the valid and legally binding obligation of Assignor enforceable against Assignor in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law; and
(g) No consent, approval, order or authorization of, or declaration, filing or registration with, any governmental entity is required to be obtained or made by Assignor in connection with the execution, delivery or performance by Assignor of this AAR Agreement, or the consummation by it of the transactions contemplated hereby. Neither Assignor nor anyone acting on its behalf has offered, transferred, pledged, sold or otherwise disposed of the Assigned Loans or any interest in the Assigned Loans, or solicited any offer to buy or accept a transfer, pledge or other disposition of the Assigned Loans, or any interest in the Assigned Loans or otherwise approached or negotiated with respect to the Assigned Loans, or any interest in the Assigned Loans with any Person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action which would constitute a distribution of the Assigned Loans under the Securities Act of 1933, as amended (the “1933 Act”) or which would render the disposition of the Assigned Loans a violation of Section 5 of the 1933 Act or require registration pursuant thereto.
3. The Assignee warrants and represents to, and covenants with, the Assignor, the Company and the Note Insurer as of the date hereof that:
(a) Assignee is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to hold the Assigned Loans as indenture trustee on behalf of the holders of Bear Stearns Second Lien Trust 2007-1, Mortgage-Backed Notes, Series 2007-1;
(b) Assignee has full corporate power and authority to execute, deliver and perform under this AAR Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this AAR Agreement is in the ordinary course of Assignee’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of Assignee’s organizational documents or any legal restriction, or any material agreement or instrument to which Assignee is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which Assignee or its property is subject. The execution, delivery and performance by Assignee of this AAR Agreement and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on part of Assignee. This AAR Agreement has been duly executed and delivered by Assignee and, upon the due authorization, execution and delivery by Assignor and the parties hereto, will constitute the valid and legally binding obligation of Assignee enforceable against Assignee in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration, filing or registration with, any governmental entity is required to be obtained or made by Assignee in connection with the execution, delivery or performance by Assignee of this AAR Agreement, or the consummation by it of the transactions contemplated hereby; and
(d) The Assignee assumes all of the rights of the Owner under the Servicing Agreement with respect to the Assigned Loans other than the right to enforce the obligations of the Servicer under the Servicing Agreement.
4. Company warrants and represents to, and covenants with, Assignee, Assignor and the Note Insurer, as of the date hereof, that:
(a) Attached hereto as Attachment 2 is a true and correct copy of the Servicing Agreement, which agreement is in full force and effect as of the date hereof and the provisions of which have not been waived, amended or modified in any respect, nor has any notice of termination been given thereunder;
(b) Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and has all requisite power and authority to service the Assigned Loans and otherwise to perform its obligations under the Servicing Agreement;
(c) Company has full corporate power and authority to execute, deliver and perform its obligations under this AAR Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this AAR Agreement is in the ordinary course of Company’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of Company’s limited liability company agreement or any legal restriction, or any material agreement or instrument to which Company is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which Company or its property is subject. The execution, delivery and performance by Company of this AAR Agreement and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on part of Company. This AAR Agreement has been duly executed and delivered by Company, and, upon the due authorization, execution and delivery by Assignor and Assignee, will constitute the valid and legally binding obligation of Company, enforceable against Company in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law;
(d) No consent, approval, order or authorization of, or declaration, filing or registration with, any governmental entity is required to be obtained or made by Company in connection with the execution, delivery or performance by Company of this AAR Agreement, or the consummation by it of the transactions contemplated hereby;
(e) Company shall establish a Custodial Account and an Escrow Account under the Servicing Agreement in favor of Assignee with respect to the Assigned Loans separate from the Custodial Account and Escrow Account previously established under the Servicing Agreement in favor of Assignor;
(f) Pursuant to Section 10.02 of the Servicing Agreement, the Company hereby restates the representations and warranties set forth in Section 3.01 of the Servicing Agreement with respect to the Company and the Assigned Loans as of the date hereof provided that Section 3.01(a) is hereby amended by deleting “corporation” and replacing it with “limited liability company” and Section 3.01(c) is hereby amended by deleting “articles of incorporation or by-laws” and replacing it with “limited liability company agreement”; and
(g) Neither this AAR Agreement nor any certification, statement, report or other agreement, document or instrument furnished or to be furnished by the Company pursuant to this AAR Agreement contains or will contain any materially untrue statement of fact or omits or will omit to state a fact necessary to make the statements contained therein not misleading.
5. Company warrants and represents to, and covenants with, Assignee, Assignor, the Note Insurer, and Bear Stearns Asset Backed Securities I LLC (“BSABS I”) as of the date hereof:
a.	Company is not aware and has not received notice that any default, early amortization or other performance triggering event has occurred as to any other securitization due to any act or failure to act of the Company;
b.	No material noncompliance with the applicable servicing criteria with respect to other securitizations of residential mortgage loans involving the Company as servicer has been disclosed or reported by the Company;
c.	Company has not been terminated as servicer in a residential mortgage loan securitization, either due to a servicing default or to application of a servicing performance test or trigger;
No material changes to the Company’s policies or procedures with respect to the servicing function it will perform under the Servicing Agreement and this AAR Agreement for mortgage loans of a type similar to the Assigned Loans have occurred during the three-year period immediately preceding the date hereof;
e.	There are no aspects of the Company’s financial condition that could have a material adverse effect on the performance by the Company of its servicing obligations under the Servicing Agreement and this AAR Agreement;
f.	There are no material legal or governmental proceedings pending (or known to be contemplated) against the Company, any Subservicer or any third-party originator; and
g.	There are no affiliations, relationships or transactions relating to the Company or any Subservicer with respect to this Securitization Transaction and any party thereto of a type described in Item 1119 of Regulation AB.
Notwithstanding anything to the contrary in the Agreement, the Company shall (or shall cause any Third-Party Originator to) (i) immediately notify Assignor and BSABS I in writing of (A) legal proceedings pending against the Company, or proceedings known to be contemplated by governmental authorities against the Company which in the judgment of the Company would be, in each case, material to purchasers of securities backed by the Assigned Loans, (B) any affiliations or relationships of the type described in Item 1119of Regulation AB that develop following the date hereof between the Company and any of the above listed parties or other parties identified in writing by the Assignor or BSABS I with respect to the Securitization Transaction and (ii) provide to the Assignor and BSABS I a description of such proceedings, affiliations or relationships.
Each such notice/update should be sent to the Assignor by e-mail to regABnotifications@bear.com. Additionally, all such notifications, other than those pursuant to (i)(A) above, should be sent to:
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751
With a copy to:
Bear, Stearns & Co. Inc.
383 Madison Avenue, 3rd Floor
New, York, NY 10179
Attention: Global Credit Administration
Facsimile: (212) 272-6564
Notifications pursuant to (i)(A) above should be sent to:
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: General Counsel
Facsimile: (469) 759-4714
With copies to:
Bear, Stearns & Co. Inc.
383 Madison Avenue, 3rd Floor
New, York, NY 10179
Attention: Global Credit Administration
Facsimile: (212) 272-6564
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751
6. Assignor hereby agrees to indemnify and hold the Assignee and the Note Insurer (and their respective successors and assigns) harmless against any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that Assignee or the Note Insurer (and their respective successors and assigns) may sustain in any way related to any breach of the representations or warranties of Assignor set forth in this AAR Agreement or the breach of any covenant or condition contained herein.
7. It is expressly understood and agreed by the parties hereto that insofar as this AAR Agreement is executed on behalf of the Assignee (i) this AAR Agreement is executed and delivered by Citibank, N.A., not in its individual capacity but solely as Indenture Trustee under the sale and servicing agreement, dated as of April 30, 2007 (the “Sale and Servicing Agreement”) among BSABS I as depositor, Bear Stearns Second Lien Trust 2007-1 as issuing entity, the Indenture Trustee, LaSalle Bank National Association as master servicer and securities administrator and the Assignor and the indenture, dated as of April 30, 2007 (the “Indenture”) among Bear Stearns Second Lien Trust 2007-1 as issuing entity, LaSalle Bank National Association as securities administrator and the Indenture Trustee, in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Assignee is made and intended not as representations, warranties, covenants, undertakings and agreements by Citibank, N.A. in its individual capacity, but is made and intended for the purpose of binding only the Assignee, (iii) under no circumstances shall Citibank, N.A. in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Assignee or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Assignee under this AAR Agreement and (iv) any recourse against the Assignee in respect of any obligations it may have under or pursuant to the terms of this AAR Agreement shall be limited solely to the assets it may hold as indenture trustee of Bear Stearns Second Lien Trust 2007-1, Mortgage-Backed Notes, Series 2007-1.
Recognition of Assignee
8. From and after the date hereof, Company shall recognize Assignee as owner of the Assigned Loans and will service the Assigned Loans for Assignee as if Assignee and Company had entered into a separate servicing agreement for the servicing of the Assigned Loans in the form of the Servicing Agreement (as modified herein), the terms of which are incorporated herein by reference. The Company acknowledges that the Assigned Loans will be part of a REMIC, and will service the Assigned Loans in accordance with the Servicing Agreement (as modified herein) but in no event in a manner that would (i) cause any REMIC to fail to qualify as a REMIC or (ii) result in the imposition of a tax upon any REMIC (including but not limited to the tax on prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in Section 860G(d) of the Code). The Company acknowledges and consents to (i) the assignment by the Assignor to the Assignee of all of the Assignor's rights against the Company pursuant to the Servicing Agreement and to the enforcement or exercise of any right or remedy against the Company pursuant to the Servicing Agreement as assigned by the Assignor and (ii) the assignment by the Assignee to Citibank, N.A. (the “Indenture Trustee”) of such rights and to the enforcement or exercise of any right or remedy by the Indenture Trustee, the Note Insurer or the Master Servicer (as defined below) acting pursuant to the Sale and Servicing Agreement (as defined below), against the Company pursuant to this AAR Agreement as assigned by the Assignee. Such enforcement of a right or remedy by the Assignee, the Master Servicer, the Note Insurer or the Indenture Trustee, as applicable, shall have the same force and effect as if the right or remedy had been enforced or exercised by the Assignor directly.
Modification of Servicing Agreement
9. The Company and Assignor hereby amend the Servicing Agreement as follows:
(a) The following definitions are added to Article I of the Servicing Agreement:
Class X Certificateholder: Any holder of a certificate designated as a “Class X Certificate” on the face thereof, as identified to the Servicer by LaSalle Bank National Association, as securities administrator, on a reasonable, regular basis.
Master Servicer: LaSalle Bank National Association, or its successors in interest.
Subsequent Recoveries: As of any Remittance Date, surplus amounts held by the Servicer to cover estimated expenses specifically related to a Revolving Credit Loan that was the subject of a liquidation or final disposition of any REO Property as of the end of the prior calendar month that resulted in a realized loss.
(b) The definition of “Business Day” is deleted in its entirety and replaced with the following:
Collection Period: With respect to any Payment Date and the HELOCs, the calendar month immediately preceding the calendar month in which such Payment Date occurs.
(d) The definition of “Custodian” is deleted in its entirety and replaced with the following:
Custodians: Wells Fargo Bank, N.A., LaSalle Bank National Association and Treasury Bank, A Division of Countrywide Bank, FSB.
(e) The definition of “Remittance Date” is deleted in its entirety and replaced with the following:
Remittance Date: The 18th day of any month, or if such 18th day is not a Business Day, the first Business Day immediately preceding such 18th day.
(f) The second sentence of Section 2.01 of the Servicing Agreement is deleted in its entirety and replaced with the following:
The obligations under the Loan Agreements to fund the related Draws to the Mortgagors shall be performed by the Servicer and reimbursed as provided in this Agreement.
(g) The second paragraph of Section 4.01 of the Servicing Agreement shall be deleted in its entirety and replaced with the following:
Consistent with and in addition to the terms set forth in this Agreement, if a Revolving Credit Loan is in default or such default is reasonably foreseeable, the Servicer may waive, modify or vary any term of any Revolving Credit Loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any mortgagor, including without limitation, to (1) capitalize any amounts owing on the Revolving Credit Loan by adding such amount to the outstanding principal balance of the Revolving Credit Loan, (2) defer such amounts to a later date or the final payment date of such Revolving Credit Loan, (3) extend the maturity of any such Revolving Credit Loan, (4) amend the related Mortgage Note to reduce the related Mortgage Interest Rate with respect to any Revolving Credit Loan, (5) convert the Mortgage Interest Rate on any Revolving Credit Loan from a fixed rate to an adjustable rate or vice versa, (6) with respect to a Revolving Credit Loan with an initial fixed rate period followed by an adjustable rate period, extend the fixed period and reduce the adjustable rate period, and/or (7) forgive the amount of any interest and principal owed by the related Mortgagor; provided that, in the Servicer’s reasonable and prudent determination, such waiver, modification, postponement or indulgence: (A) is not materially adverse to the interests of the Owner on a present value basis using reasonable assumptions (including taking into account any estimated Realized Loss that might result absent such action); and (B) does not amend the related Mortgage Note to extend the maturity thereof later than the date of the Latest Possible Maturity Date (as such term is defined in the related pooling and servicing agreement); provided, further, with respect to any Revolving Credit Loan that is not in default or if default is not reasonably foreseeable, unless the Servicer has provided to the Owner a certification addressed to the Owner, based on the advice of counsel or certified public accountants that have a national reputation with respect to taxation of REMICs that a modification of such Revolving Credit Loan will not result in the imposition of taxes on or disqualify from REMIC status any of the REMICs and has obtained the prior written consent of the Owner, the Servicer shall not permit any modification with respect to any Revolving Credit Loan. Notwithstanding the foregoing, for any modification which may result in a realized loss of 20% or more of the outstanding principal balance of a Revolving Credit Loan, the Company shall present such proposed modification, together with any supporting documentation, to the Master Servicer for consideration and approval.
In the event of any such waiver, modification, postponement or indulgence which has been agreed to in writing by the Owner and which permits the deferral of interest or principal payments on any Revolving Credit Loan, the Servicer shall, on the Business Day immediately preceding the related Remittance Date in any month in which any such principal or interest payment has been deferred, deposit in the Custodial Account from its own funds, in accordance with Section 4.04, the difference between (a) such month's principal and one month's interest at the related Revolving Credit Loan Remittance Rate on the unpaid principal balance of such Revolving Credit Loan and (b) the amount paid by the Mortgagor. The Servicer shall be entitled to reimbursement for such advances to the same extent as for all other advances pursuant to Section 4.05. Without limiting the generality of the foregoing, the Servicer shall continue, and is hereby authorized and empowered, to prepare, execute and deliver, all instruments of satisfaction or cancellation, or of partial or full release, discharge and all other comparable instruments, with respect to the Revolving Credit Loans and with respect to the Mortgaged Properties.
(h) The second paragraph of Section 4.03 of the Servicing Agreement shall be deleted in its entirety and replaced with the following:
The Servicer must charge off a Revolving Credit Loan at the time such Revolving Credit Loan becomes 180 days delinquent unless the Servicer reasonably believes that it may be able to obtain a net recovery through foreclosure proceedings or other conversion of the related Revolving Credit Loan. Once a Revolving Credit Loan is charged off, the Servicer will not be entitled to any additional servicing fee for such Revolving Credit Loan, except to the extent of any unpaid Servicing Fees and expenses which will be reimbursable from any recoveries on such Revolving Credit Loan, and the Revolving Credit Loan will be treated as a liquidated Revolving Credit Loan.
Unless specific Subsequent Recoveries are anticipated, as applicable, on a particular Revolving Credit Loan that is charged off as described in the preceding paragraph, such charged off Revolving Credit Loan will be released from the trust estate, and will be transferred to the Class X Certificateholder. If any related Subsequent Recoveries are anticipated on such charged off Revolving Credit Loans, the release of the Revolving Credit Loans from the trust estate will be delayed until the distribution date after receipt of such related Subsequent Recoveries. After the release of any charged off Revolving Credit Loan, the Class X Certificateholder will be entitled to any amounts subsequently received in respect of any such released Revolving Credit Loans, subject to any fees or expenses owed to the Master Servicer. Such Class X Certificateholder may designate any servicer to service any such released Revolving Credit Loan and the Class X Certificateholder may sell any such released Revolving Credit Loan to a third party. To the extent the servicing of such released charged-off Revolving Credit Loan is not transferred from the Servicer, the servicing of such released charged-off Revolving Credit Loan and the fees therefor shall be governed by a separate servicing agreement under terms similar to this Agreement.
(i) Subsection 4.05(iv) of the Servicing Agreement is deleted in its entirety and replaced with the following:
(iv) subject to the terms of Section 5.01 below, to reimburse the Servicer the amount of any Additional Balances funded by the Servicer from payments on account of principal on deposit in the Custodial Account;
(j) Section 4.05 of the Servicing Agreement is hereby amended by deleting the following at the end of clause (ii) of Section 4.05 in its entirety:
provided, however, that prior to the Servicer receiving reimbursements from the Owner pursuant to this clause (ii), the Servicer shall submit a claim for reimbursement in the form of Exhibit J hereto to the Owner seeking approval within ninety (90) days of final liquidation of the Revolving Credit Loan (except that the Servicer shall not submit more than four (4) claims for reimbursement within such ninety (90) day period). The Owner shall provide such approval or denial to the Servicer no later than thirty (30) days after receipt of such claim; provided, however, such claim must be complete with all supporting documentation;.
(k) The first and second paragraphs of Section 5.01 of the Servicing Agreement are hereby deleted and replaced with the following:
The Servicer shall furnish to the Master Servicer and the Class I-S Certificateholder, a monthly remittance report in accordance with Section 5.02. The monthly remittance report shall indicate the aggregate amount of Additional Balances created during the related Collection Period. If the monthly remittance report indicates that (i) (x) the aggregate amount of Additional Balances created during the prior calendar month exceeds (y) the amount required to be on deposit in the Custodial Account with respect to principal collections as of the close of business on the last day of the month immediately preceding the month in which the related Remittance Date occurs (which amount, for the avoidance of doubt, is the amount required to be remitted to the Owner with respect to principal collections on such Remittance Date pursuant to the immediately preceding paragraph), the Servicer shall provide a notice to Class I-S Certificateholder indicating the amount of such excess, and (ii) the amount described in clause (y) above exceeds the amount described in clause (x) above, the Servicer shall (1) in accordance with the terms and conditions of Section 4.05(iv) above, be entitled to withdraw from the Custodial Account from principal collections an amount equal to the amount described in clause (x) above and (2) remit to the Owner the related monthly remittance. The Class I-S Certificateholder shall, by 5:00 p.m. Eastern Time on such Remittance Date, remit to the Servicer by wire transfer the amount of any such excess as described in clause (i) hereof.
(l) The first paragraph of Section 5.02 of the Servicing Agreement is hereby deleted in its entirety and replaced with the following:
The Servicer shall furnish to the Owner an individual Revolving Credit Loan accounting report (a “Report”), as of the last day of the Collection Period of each month, in the Servicer's assigned loan number order to document Revolving Credit Loan payment activity on an individual Revolving Credit Loan basis. With respect to each month, such Report shall be received by the Owner (i) no later than the fifteenth (15^th) calendar day of the month of the related Remittance Date, on a disk or tape or other computer-readable format, in such format as may be mutually agreed upon by both the Owner and the Servicer, and (ii) no later than the twentieth (20^th) calendar day of the month of the related Remittance Date in hard copy, which Report shall contain the following:
(i) Additional Balances created during the Collection Period;
(iii) with respect to each Revolving Credit Loan and each Monthly Payment, the amount of such remittance allocable to interest;
(iv) with respect to each Revolving Credit Loan, the amount of servicing compensation received by the Servicer during the prior Collection Period;
(vi) with respect to each Revolving Credit Loan, the current Mortgage Interest Rate;
(viii) [Reserved];
(x) with respect to each Revolving Credit Loan, and in the aggregate for all Revolving Credit Loans, the amount of any Monthly Advances made by the Servicer during the prior Collection Period;
(xv) with respect to each Revolving Credit Loan, the Stated Principal Balance of any Revolving Credit Loan that has been repurchased by the Servicer.
(xvi) each Revolving Credit Loan that has been charged off, released from the trust estate and transferred to the Class X Certificateholder pursuant to Section 4.03 of this Agreement.
(m) Exhibit F in the Servicing Agreement shall be modified by deleting the words “Wells Fargo Bank”, “WFB” and “Wells Fargo Bank, N.A.” and replacing them with “LaSalle Bank National Association”, where applicable.
(n) Exhibit I of the Servicing Agreement is deleted in its entirety and replaced with the following:
EXHIBIT I
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
AND RELATED ACCOUNTANT’S ATTESTATION
The assessment of compliance to be delivered by [the Servicer] [Name of Subservicer] shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria”:
*Servicing Criteria*		*Applicable Servicing Criteria*
Reference	Criteria
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	X
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.	X
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.	X
	Cash Collection and Administration
1122(d)(2)(i)	Payments on mortgage loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.	X
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	X
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.	X
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	X
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	X
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.	X
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.	X
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of mortgage loans serviced by the Servicer.	X (with respect to A, B and D only)
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	X
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.	X
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	X
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on mortgage loans is maintained as required by the transaction agreements or related mortgage loan documents.	X
1122(d)(4)(ii)	Mortgage loan and related documents are safeguarded as required by the transaction agreements	X
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	X
1122(d)(4)(iv)	Payments on mortgage loans, including any payoffs, made in accordance with the related mortgage loan documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related mortgage loan documents.	X
1122(d)(4)(v)	The Servicer’s records regarding the mortgage loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	X
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor's mortgage loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.	X
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	X
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a mortgage loan is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent mortgage loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	X
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for mortgage loans with variable rates are computed based on the related mortgage loan documents.	X
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s mortgage loan documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable mortgage loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related mortgage loans, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.	X
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.	X
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.	X
*The term “investor under this Exhibit G shall mean “master servicer.”
[NAME OF COMPANY] [NAME OF SUBSERVICER]
Date: _________________________
By: _________________________
Name:
Title:
(o) Exhibit J of the Servicing Agreement is deleted in its entirety and replaced with the following
REPORTING DATA FOR REALIZED LOSSES AND GAINS
2. The numbers on the 332 form correspond with the numbers listed below.
Liquidation and Acquisition Expenses:
4-12.
Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form - breakdown required showing period
of coverage, base tax, interest, penalty. Advances prior to default require evidence of servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and WFB’s approved Officer Certificate
* Unusual or extraordinary items may require further documentation.
13.
The total of lines 1 through 12.
3. Credits:
14-21.
Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3^rd Party Sale, bid instructions and Escrow Agent / Attorney
Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22.
The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial proceeds and line (18b) for Part B/Supplemental proceeds.
Total Realized Loss (or Amount of Any Gain)
23.
The total derived from subtracting line 22 from 13. If the amount represents a realized gain, show the amount in parenthesis ( ).
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address:_____________________
Servicer Loan No.
Servicer Name
Servicer Address
LASALLE BANK NATIONAL ASSOCIATION Loan No.____________________________
Borrower's Name:
_________________________________________________________
Property Address: _________________________________________________________
Liquidation Type: REO Sale 3^rd Party Sale Short Sale Charge Off
Was this loan granted a Bankruptcy deficiency or cramdown Yes No
If “Yes”, provide deficiency or cramdown amount _______________________________
Liquidation and Acquisition Expenses:
(1)	Actual Unpaid Principal Balance of Mortgage Loan		$	(1)
(2)	Interest accrued at Net Rate			(2)
(3)	Accrued Servicing Fees			(3)
(4)	Attorney's Fees			(4)
(5)	Taxes (see page 2)			(5)
(6)	Property Maintenance			(6)
(7)	MI/Hazard Insurance Premiums (see page 2)			(7)
(8)	Utility Expenses			(8)
(9)	Appraisal/BPO			(9)
(10)	Property Inspections			(10)
(11)	FC Costs/Other Legal Expenses			(11)
(12)	Other (itemize)			(12)
		Cash for Keys		(12)
		HOA/Condo Fees		(12)
				(12)

		Total Expenses	$	(13)
Credits:
(14)	Escrow Balance		$	(14)
(15)	HIP Refund			(15)
(16)	Rental Receipts			(16)
(17)	Hazard Loss Proceeds			(17)
(18)	Primary Mortgage Insurance / Gov’t Insurance			(18a)
HUD Part A

HUD Part B				(18b)
(19)	Pool Insurance Proceeds			(19)
(20)	Proceeds from Sale of Acquired Property			(20)
(21)	Other (itemize)			(21)
				(21)

	Total Credits		$	(22)
Total Realized Loss (or Amount of Gain)			$	(23)
Escrow Disbursement Detail
Type (Tax /Ins.)	Date Paid	Period of Coverage	Total Paid	Base Amount	Penalties	Interest
Miscellaneous
10. All demands, notices and communications related to the Assigned Loans, the Servicing Agreement and this AAR Agreement shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by registered mail, postage prepaid, as follows:
a. In the case of Company,
GMAC Mortgage, LLC
500 Enterprise Road
Attention: Mr. Frank Ruhl
Telecopier No.: (215) 682-3396
b. In the case of Assignor,
EMC Mortgage Corporation
2780 Lake Vista Drive
Lewisville, Texas 75067
Attention: General Counsel
Telecopier No.: (469) 759-4714
c. In the case of Assignee,
Citibank, N.A., as Indenture Trustee
388 Greenwich Street, 14th Floor
New York, New York 10013
Attention: BSSLT 2007-1
Telecopier No.: (212) 816-5527
d. In the case of the Note Insurer:
Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention: Risk Management- Consumer Asset-Backed Securities
Telecopier No.: (212)668-0340
11. The Company hereby acknowledges that LaSalle Bank National Association (the “Master Servicer”) has been appointed as the master servicer of the Assigned Loans pursuant to the Sale and Servicing Agreement, dated as of April 30, 2007, among the Assignor, the Assignee, BSABS I, the Indenture Trustee and the Master Servicer, and therefor has the right to enforce all obligations of the Company, as they relate to the Assigned Loans, under the Servicing Agreement. Such right will include, without limitation, the right to terminate the Company under the Servicing Agreement upon the occurrence of an event of default thereunder, the right to receive all remittances required to be made by the Company under the Servicing Agreement, the right to receive all monthly reports and other data and all notices required to be delivered by the Company under the Servicing Agreement, the right to examine the books and records of the Company, indemnification rights, and the right to exercise certain rights of consent and approval relating to actions taken by the Company. The Company shall make all distributions under the Servicing Agreement, as they relate to the Assigned Loans, to the Master Servicer by wire transfer of immediately available funds to:
LaSalle Bank N.A.
ABA# 071000505
Account no. 900328.1
Attn: Renee Dettman - BSSLT 2007-1
LaSalle Bank National Association
135 S. LaSalle St., Suite 1625
Chicago, IL 60603
Attention: Global Securities and Trust Services Group-BSSLT 2007-1
12. THIS AAR AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
13. No term or provision of this AAR Agreement may be waived or modified unless such waiver or modification is in writing, signed by the party against whom such waiver or modification is sought to be enforced and is with the prior written consent of the Note Insurer (which consent shall not be unreasonably withheld) if any such waiver or modification shall adversely affect the interests of the Note Insurer.
14. This AAR Agreement shall inure to the benefit of the successors and assigns of the parties hereto and the Note Insurer (as a third party beneficiary hereof). Any entity into which Assignor, Assignee, Company or BSABS I may be merged or consolidated shall, without the requirement for any further writing, be deemed Assignor, Assignee, Company or BSABS I respectively, hereunder.
15. This AAR Agreement shall survive the conveyance of the Assigned Loans, the assignment of the Servicing Agreement to the extent of the Assigned Loans by Assignor to Assignee and the termination of the Servicing Agreement.
16. This AAR Agreement may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original and all such counterparts shall constitute one and the same instrument.
17. In the event that any provision of this AAR Agreement conflicts with any provision of the Servicing Agreement with respect to the Assigned Loans, the terms of this AAR Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
EMC MORTAGE CORPORATION,the Assignor			CITIBANK, N.A., Assignee, not individually but solely as Indenture Trustee for the holders of Bear Stearns Second Lien Trust 2007-1, Mortgage-Backed Notes, Series 2007-1

By:			By:
Name:			Name:
Title:			Title:


GMAC MORTGAGE, LLC, the Company

By:
Name:
Title:
Acknowledged and Agreed
LASALLE BANK NATIONAL ASSOCIATION Master Servicer

By:
Name:
Title:


Acknowledged and Agreed

BEAR STEARNS ASSET BACKED SECURITIES I LLC

By:
Name:	Joseph T. Jurkowski, Jr.
Title:	Vice President
ATTACHMENT 1
ASSIGNED LOANS
(Provided Upon Request)
ATTACHMENT 2
SERVICING AGREEMENT
EXHIBIT C-3
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
EMC MORTGAGE CORPORATION,
Purchaser
GREENPOINT MORTGAGE FUNDING, INC.,
Seller and Servicer
SELLER’S PURCHASE, WARRANTIES AND SERVICING AGREEMENT
Dated as of October 18, 2004
Revolving Credit Loans, Series 2004-1
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
ARTICLE II
SERVICING OF REVOLVING CREDIT LOANS; RECORD TITLE AND POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT; REVOLVING CREDIT LOAN DOCUMENTS
Section 2.01. Agreement to Purchase.
Section 2.02. Purchase Price.
Section 2.03. Servicing of Revolving Credit Loans.
Section 2.04. Record Title and Possession of Mortgage Files; Maintenance of Servicing Files.
Section 2.05. Books and Records.
Section 2.06. Transfer of Revolving Credit Loans.
Section 2.07. Delivery of Revolving Credit Loan Documents.
Section 2.08. Quality Control Procedures.
Section 2.09. Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE SERVICER;
REPURCHASE; REVIEW OF REVOLVING CREDIT LOANS
Section 3.01. Representations and Warranties of the Seller and the Servicer.
Section 3.02. Representations and Warranties as to Individual Revolving Credit Loans.
Section 3.03. Repurchase; Substitution.
Section 3.04. Repurchase of Revolving Credit Loans With Early Payment Defaults.
Section 3.05. Purchase Price Protection.
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE REVOLVING CREDIT LOANS
Section 4.01. The Servicer to Act as Servicer.
Section 4.02. Collection of Revolving Credit Loan Payments.
Section 4.03. Realization Upon Defaulted Revolving Credit Loans.
Section 4.04. Establishment of Custodial Accounts; Deposits in Custodial Accounts.
Section 4.05. Permitted Withdrawals From the Custodial Account.
Section 4.06. Establishment of Escrow Accounts; Deposits in Accounts.
Section 4.07. Permitted Withdrawals From the Escrow Account.
Section 4.08. Payment of Taxes, Insurance and Charges; Collections Thereunder.
Section 4.09. Transfer of Accounts
Section 4.10. Maintenance of Hazard Insurance.
Section 4.11. Maintenance of Mortgage Impairment Insurance Policy.
Section 4.12. Maintenance of Fidelity Bond and Errors and Omissions Insurance.
Section 4.13. Title, Management and Disposition of REO Property.
Section 4.14. Notification of Maturity Date.
Section 4.15. Subordination of Lien Priority.
ARTICLE V
PAYMENTS TO THE PURCHASER
Section 5.01. Distributions.
Section 5.02. Statements to the Purchaser.
Section 5.03. Liquidation Reports.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01. Assumption Agreements.
Section 6.02. Satisfaction of Mortgages and Release of Mortgage Files.
Section 6.03. Servicing Compensation.
Section 6.04. Annual Statement as to Compliance.
Section 6.05. Annual Independent Certified Public Accountants’ Servicing Report.
Section 6.06. Purchaser’s Right to Examine Servicer Records.
Section 6.07. Servicer Shall Provide Information as Reasonably Required.
ARTICLE VII
[RESERVED]
ARTICLE VIII
THE SELLER AND THE SERVICER
Section 8.01. Indemnification; Third Party Claims.
Section 8.02. Merger or Consolidation of the Seller or the Servicer.
Section 8.03. Limitation on Liability of the Seller and Others.
Section 8.04. Servicer Not to Resign.
Section 8.05. No Transfer of Servicing.
ARTICLE IX
DEFAULT
Section 9.01. Events of Default.
Section 9.02. Waiver of Defaults.
ARTICLE X
TERMINATION
Section 10.01. Termination.
Section 10.02. Purchase of Servicing.
ARTICLE XI
RECONSTITUTION OF REVOLVING CREDIT LOANS
Section 11.01. Reconstitution of Revolving Credit Loans.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Successor to the Servicer.
Section 12.02. Amendment.
Section 12.03. Recordation of Agreement.
Section 12.04. Governing Law.
Section 12.05. Notices.
Section 12.06. Severability of Provisions.
Section 12.07. Exhibits.
Section 12.08. General Interpretive Principles.
Section 12.09. Reproduction of Documents.
Section 12.10. Confidentiality of Information.
Section 12.11. Recordation of Assignments of Mortgage.
Section 12.12. Assignment by Purchaser.
Section 12.13. No Partnership.
Section 12.14. Execution; Successors and Assigns.
Section 12.15. Entire Agreement.
Section 12.16. No Solicitation.
This is a Seller’s Purchase, Warranties and Servicing Agreement, dated as October 18, 2004 and is executed between EMC Mortgage Corporation, as purchaser (the “Purchaser”), and Greenpoint Mortgage Funding, Inc., as seller (in such capacity, the “Seller”) and as servicer (in such capacity, the “Servicer”).
W I T N E S S E T H :
WHEREAS, the Purchaser has heretofore agreed to purchase from the Seller and the Seller has heretofore agreed to sell to the Purchaser certain Revolving Credit Loans, pursuant to the terms of a letter agreement by and between the Seller and the Purchaser (the “Purchase Price and Terms Letter”).
WHEREAS, each of the Revolving Credit Loans is secured by a mortgage, deed of trust or other security instrument creating a first or second lien on a residential dwelling located in the jurisdiction indicated on the Revolving Credit Loan Schedule, which is annexed hereto as Exhibit F;
WHEREAS, the Purchaser, the Seller and the Servicer wish to prescribe the representations and warranties of the Seller with respect to itself and the Revolving Credit Loans and the management, servicing, transfer and control of the Revolving Credit Loans by the Servicer;
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meaning specified in this Article:
Accepted Servicing Practices: With respect to any Revolving Credit Loan, those servicing standards, policies and procedures applicable to mortgage loans owned by Fannie Mae and Freddie Mac as set forth in the Fannie Mae Guides and the Freddie Mac Guides for servicers of such mortgage loans or, with respect to matters not addressed thereby, those mortgage servicing practices (including collection procedures) of prudent mortgage banking institutions which service Revolving Credit Loans of the same type as such Revolving Credit Loan in the jurisdiction where the related Mortgaged Property is located.
Additional Balance: With respect to any Revolving Credit Loan, any future Draw made by the related Mortgagor pursuant to the related Loan Agreement after the applicable Cut-off Date.
Adjustment Date: With respect to each Revolving Credit Loan, the date set forth in the related Mortgage Note on which the Mortgage Interest Rate on the Revolving Credit Loan is adjusted in accordance with the terms of the Mortgage Note.
Agency: Fannie Mae and/or Freddie Mac, as applicable.
Agreement: This Seller’s Purchase, Warranties and Servicing Agreement including all exhibits hereto, amendments hereof and supplements hereto.
Amortization Period: With respect to any Revolving Credit Loan, the period of time subsequent to the Draw Period during which the borrower is obligated to make Minimum Monthly Payments equal to interest accrued on the Principal Balance plus 1/120^th of such Principal Balance.
Appraised Value: The value set forth in an appraisal made in connection with the origination of the related Revolving Credit Loan as the value of the related Mortgaged Property.
Assignment: An assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form and (other than with respect to the blank assignee) is sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the transfer of the Mortgage.
BIF: The Bank Insurance Fund, or any successor thereto.
Billing Cycle: With respect to any Revolving Credit Loan and Due Date, the calendar month preceding that Due Date.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a legal holiday in the State of New York, California or Texas, or (iii) a day on which banks in the State of New York, California or Texas are authorized or obligated by law or executive order to be closed.
Cancellation Fee: With respect to any Revolving Credit Loan, a $500 fee required to be paid pursuant to the related Loan Agreement by the Mortgagor in connection with an early termination of such Revolving Credit Loan.
Closing Date: October 26, 2004, or such other date mutually agreed upon by the parties hereto.
Code: The Internal Revenue Code of 1986, as the same may be amended from time to time (or any successor statute thereto).
Combined Loan-to-Value Ratio or CLTV: With respect to any second lien Revolving Credit Loan, the sum of the Credit Limit of such Revolving Credit Loan and the outstanding principal balance of any related First Lien, divided by the lesser of the Appraised Value of the Mortgaged Property as of the origination date or the purchase price of the Mortgaged Property.
Commission: The Securities and Exchange Commission.
Credit Limit: With respect to any Revolving Credit Loan, the maximum unpaid Principal Balance permitted under the terms of the related Loan Agreement.
Credit Score: The credit score for each Revolving Credit Loan shall be the minimum of two credit bureau scores obtained at origination or such other time by the Seller. If two credit bureau scores are obtained, the Credit Score will be the lower score. If three credit bureau scores are obtained, the Credit Score will be the middle of the three. When there is more than one applicant, the lowest of the applicants’ Credit Scores will be used. There is only one (1) score for any loan regardless of the number of borrowers and/or applicants. The minimum Credit Score for each Revolving Credit Loan will be in accordance with the Seller’s Underwriting Standards (as defined below).
Custodial Account: Each separate demand account or accounts created and maintained pursuant to Section 4.04 which shall be entitled “GreenPoint Mortgage Funding, Inc., in trust for EMC Mortgage Corporation, Owner of Revolving Loans Series 2004-1” and shall be established as an Eligible Account, in the name of the Person that is the “Purchaser” with respect to the related Revolving Credit Loans.
Cut-off Date: October 18, 2004.
Cut-off Date Loan Balance: With respect to Revolving Credit Line Loan, the unpaid principal balance thereof as of the Cut-off Date.
Delinquent: A Revolving Credit Loan is “Delinquent” if any Minimum Monthly Payment due on a Due Date is not made by the close of business on the next scheduled Due Date for that Revolving Credit Loan (including all foreclosures and bankruptcies). A Revolving Credit Loan is “30 days Delinquent” if the Minimum Monthly Payment has not been received by the close of business on the corresponding day of the month immediately succeeding the month in which that Minimum Monthly Payment was due or, if there was no corresponding date (e.g., as when a 30-day month follows a 31-day month in which the payment was due on the 31st day of that month), then on the last day of that immediately succeeding month; and similarly for “60 days Delinquent” and “90 days Delinquent,” etc.
Due Date: The day of the month on which the Minimum Monthly Payment is due on a Revolving Credit Loan, exclusive of any days of grace, as set forth on the Revolving Credit Loan Schedule.
Draw: With respect to any Revolving Credit Loan, a borrowing by the Mortgagor under the related Loan Agreement.
Draw Period: With respect to each Revolving Credit Loan, the period commencing after the date of origination of such Revolving Credit Loan, during which the related Mortgagor is permitted to make Draws. A Draw Period shall be one of either five (5) years or fifteen (15) years.
Eligible Account: An account established and maintained: (a) within FDIC insured accounts (or other accounts with comparable insurance coverage acceptable to the Rating Agencies) created, maintained and monitored by the Servicer so that all funds deposited therein are fully insured, (b) with the corporate trust department of a financial institution whose commercial paper or other short term debt obligations (or, in the case of a depository institution or trust company which is the principal subsidiary of a holding company, the commercial paper or other short term debt obligations of such holding company) have been rated by each Rating Agency in its highest short-term rating category, and, if ownership of the Revolving Credit Loans is evidenced by mortgaged backed securities, the equivalent ratings of the Rating Agencies, and held such that the rights of the Purchaser and the owner of the Revolving Credit Loans shall be fully protected against the claims of any creditors of the Seller and of any creditors or depositors of the institution in which such account is maintained or (c) in a separate non-trust account without FDIC or other insurance in an Eligible Institution. In the event that a Custodial Account is established pursuant to clause (b) or (c) of the preceding sentence, the Servicer shall provide the Purchaser with written notice on the Business Day following the date on which the applicable institution fails to meet the applicable ratings requirements.
Eligible Institution: An institution having (i) the highest short-term debt rating, and one of the two highest long-term debt ratings of the Rating Agency; or (ii) with respect to any Custodial Account, an unsecured long-term debt rating of at least one of the two highest unsecured long-term debt ratings of the Rating Agencies.
Equity: With respect to any second lien Revolving Credit Loan, the Appraised Value, less the unpaid principal balance of the related First Lien.
Equity Loan-to-Value: With respect to any second lien Revolving Credit Loan, the original principal balance of such Revolving Credit Loan, divided by the Equity.
Escrow Account: Each separate trust account or accounts created and maintained pursuant to Section 4.06 which shall be entitled “ GreenPoint Mortgage Funding, Inc. in trust for EMC Mortgage Corporation, Owner of Revolving Loans Series 2004-1, and various Mortgagors” and shall be established as an Eligible Account, in the name of the Person that is the “Purchaser” with respect to the related Revolving Credit Loans.
Event of Default: Any one of the conditions or circumstances enumerated in Section 9.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Fannie Mae: The entity formerly known as the Federal National Mortgage Association, or any successor thereto.
Fannie Mae Guides: The Fannie Mae Sellers’ Guide and the Fannie Mae Servicers’ Guide and all amendments or additions thereto, including any, but not limited to, future updates thereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer pursuant to Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
First Lien: With respect to any second lien Revolving Credit Loan, the mortgage loan relating to the corresponding Mortgaged Property having a first priority lien.
First Remittance Date: October 27, 2004.
Freddie Mac: The entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto.
Freddie Mac Guides: The Freddie Mac Sellers’ Guide and the Freddie Mac Servicers’ Guide and all amendments or additions thereto, including, but not limited to, any future updates thereof.
GAAP: Generally accepted accounting procedures, consistently applied.
Gross Margin: With respect to any Revolving Credit Loan, the fixed percentage amount set forth in the related Mortgage Note and the Revolving Credit Loan Schedule that is added to the Index on each Adjustment Date in accordance with the terms of the related Mortgage Note to determine the new Mortgage Interest Rate for such Revolving Credit Loan.
HUD: The United States Department of Housing and Urban Development or any successor thereto.
Index: With respect to any Revolving Credit Loan, the Prime Rate.
Insurance Proceeds: With respect to each Revolving Credit Loan, proceeds of insurance policies insuring the Revolving Credit Loan or the related Mortgaged Property.
Liquidation Proceeds: Amounts received in connection with the partial or complete liquidation of a defaulted Revolving Credit Loan, whether through the sale or assignment of such Revolving Credit Loan, trustee’s sale, foreclosure sale or otherwise.
Loan Agreement: With respect to any Revolving Credit Loan, the credit line account agreement executed by the related Mortgagor and any amendment or modification thereof.
Loan-to-Value Ratio or LTV: With respect to any first lien Revolving Credit Loan, the Credit Limit of such Revolving Credit Loan, divided by the lesser of (1) the Appraised Value of the Mortgaged Property as of the date of origination or (2) the purchase price of the Mortgaged Property.
Maximum Mortgage Interest Rate: With respect to each Revolving Credit Loan, a rate that is set forth on the Revolving Credit Loan Schedule and in the related Mortgage Note and is the maximum interest rate to which the Mortgage Interest Rate on such Revolving Credit Loan may be increased on any Adjustment Date.
MERS: Mortgage Electronic Registration Statement Systems, Inc., a corporation organized and existing under the laws of the State of Delaware.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.
MERS System: The system of recording transfers of mortgages electronically maintained by MERS.
Minimum Monthly Payment: With respect to any Revolving Credit Loan and any month, the minimum amount required to be paid by the related Mortgagor in that month.
Minimum Mortgage Interest Rate: With respect to each Revolving Credit Loan, a rate that is set forth on the Revolving Credit Loan Schedule and in the related Mortgage Note and is the minimum interest rate to which the Mortgage Interest Rate on such Revolving Credit Loan may be decreased on any Adjustment Date.
Mortgage: With respect to a Revolving Credit Loan, the mortgage, deed of trust or other instrument securing a Mortgage Note which creates a first or second lien on an unsubordinated estate in fee simple in real property securing the Mortgage Note; except that with respect to real property located in jurisdictions in which the use of leasehold estates for residential properties is a widely-accepted practice, the mortgage, deed of trust or other instrument securing the Mortgage Note may secure and create a first or second lien upon a leasehold estate of the Mortgagor.
Mortgage File: With respect to each Revolving Credit Loan, the documents pertaining thereto specified in Exhibit A-1 and any additional documents required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: With respect to any Revolving Credit Loan and any day, the annual rate at which interest accrues on any Revolving Credit Loan in accordance with the provisions of the related Loan Agreement.
Mortgage Note: The note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to a Revolving Credit Loan, the underlying real property securing repayment of a Mortgage Note, consisting of a fee simple parcel of real estate or a leasehold estate, the term of which is equal to or longer than the term of the related Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
OCC: Office of the Comptroller of the Currency, its successors and assigns.
Officers’ Certificate: A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President, a Senior Vice President or a Vice President and by the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant Secretaries of the Seller, and delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee of the party on behalf of whom the opinion is being given, reasonably acceptable to the Purchaser.
OTS: Office of Thrift Supervision.
Pass-Through Transfer: As defined in Section 11.01(a)(ii).
Person: Any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
Prepayment Penalty: With respect to each Revolving Credit Loan, any prepayment penalty, other than a Cancellation Fee, payable in connection with a Principal Prepayment on such Revolving Credit Loan made on or after the Cut-off Date.
Prime Rate: The prime rate announced to be in effect from time to time as published as the average rate in The Wall Street Journal (Northeast Edition).
Principal Balance: As to each Revolving Credit Loan, (i) the principal balance of such Revolving Credit Loan at the applicable Cut-off Date after giving effect to payments of principal received on or before such date, plus (ii) any Additional Balances in respect of such Revolving Credit Loan, minus (iii) all amounts previously distributed to the Purchaser with respect to the Revolving Credit Loan representing payments or recoveries of principal or advances in lieu thereof.
Principal Prepayment: Any full or partial payment or other recovery of principal on a Revolving Credit Loan which is received in advance of its scheduled Due Date, including any Cancellation Fee or premium thereon and which is not accompanied by an amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.
Purchase Price: As defined in Section 2.02 herein.
Purchase Price and Terms Letter: As defined in the Recitals to this Agreement, which may also be a form of trade execution notice.
Purchaser: EMC Mortgage Corporation, its successors in interest and assigns.
Qualified Appraiser: With respect to each Revolving Credit Loan, an appraiser, duly appointed by the Seller, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Revolving Credit Loan, and such appraiser and the appraisal made by such appraiser both satisfy the requirements of Fannie Mae or Freddie Mac and Title XI of FIRREA and the regulations promulgated thereunder, all as in effect on the date the Revolving Credit Loan was originated.
Qualified Insurer: An insurance company duly qualified as such under the laws of the states in which the Mortgaged Properties are located, duly authorized and licensed in such states to transact the applicable insurance business and to write the insurance provided by the insurance policy issued by it, approved as an insurer by Fannie Mae and Freddie Mac.
Rating Agencies: Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody’s Investors Service, Inc. or, in the event that some or all ownership of the Revolving Credit Loans is evidenced by mortgage-backed securities, the nationally recognized rating agencies issuing ratings with respect to such securities, if any.
Registration Statement: The Seller’s current registration statement on Form S-3, as amended, relating to the offering from time to time of mortgage-backed pass-through certificates, as heretofore declared effective by the Securities and Exchange Commission.
Refinanced Revolving Credit Loan: A Revolving Credit Loan which was made to a Mortgagor who owned the Mortgaged Property prior to the origination of such Revolving Credit Loan and the proceeds of which were used in whole or part to satisfy an existing mortgage.
REMIC: A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.
Remittance Date: Every Business Day beginning with the First Remittance Date.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: Amounts received by the Servicer in connection with an REO Disposition.
REO Property: A Mortgaged Property acquired by or on behalf of the Purchaser in full or partial satisfaction of the related Mortgage as described in Section 4.13.
Repurchase Price: With respect to any Revolving Credit Loan, a price equal to (i) the product of XXX% and the outstanding Principal Balance of the Revolving Credit Loan, plus (ii) interest on such outstanding Principal Balance at the related Mortgage Interest Rate from the last date through which interest was last paid and distributed to the Purchaser to the date of repurchase, plus, (iii) with respect to any purchase by the Seller pursuant to Section 3.03, any costs and damages actually incurred and paid by or on behalf of the Purchaser in connection with any breach of the representation and warranty set forth in Section 3.02(h), (aaa) and (bbb), as applicable, as a result of a violation of a predatory or abusive lending law applicable to such Revolving Credit Loan, plus, (iv) third party expenses incurred in connection with the transfer of the Revolving Credit Loan being repurchased; less amounts received in respect of interest on such repurchased Revolving Credit Loan which are being held in the Custodial Account on the date of repurchase, if any.
Reserve Account: The account maintained by the Purchaser specified on Exhibit J to this Agreement.
Revolving Credit Loan: An individual Revolving Credit Loan which is the subject of this Agreement, including any Additional Balances with respect thereto, each Revolving Credit Loan originally sold and subject to this Agreement being identified on the Revolving Credit Loan Schedule, which Revolving Credit Loan includes without limitation the Mortgage File, the Minimum Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds, and all other rights, benefits, proceeds and obligations arising from or in connection with such Revolving Credit Loan, excluding replaced or repurchased Revolving Credit Loans.
Revolving Credit Loan Documents: The documents contained in a Mortgage File.
Revolving Credit Loan Schedule: The schedule of Revolving Credit Loans annexed hereto as Exhibit F, such schedule setting forth the following information with respect to each Revolving Credit Loan:
(1) the Seller’s Revolving Credit Loan identifying number;
(2) the Mortgagor’s name;
(3) the street address of the Mortgaged Property including the state and zip code;
(4) a code indicating whether the Mortgaged Property is owner-occupied;
(5) the type of residential property constituting the Mortgaged Property;
(6) the original months to maturity or the remaining months to maturity from the Cut-off Date, in any case based on the original amortization schedule and, if different, the maturity expressed in the same manner but based on the actual amortization schedule;
(7) with respect to each first lien Revolving Credit Loan, the Loan-to-Value Ratio at origination and as of the Cut-off Date
(8) with respect to each second lien Revolving Credit Loan, the Combined Loan-to-Value Ratio and the Equity Loan-to-Value Ratio, each at origination and as of the Cut-off Date;
(9) the Mortgage Interest Rate at origination and as of the Cut-off Date;
(10) the Revolving Credit Loan origination date;
(11) the paid through date;
(12) the stated maturity date of the Revolving Credit Loan and of the First Lien;
(13) the amount of the Minimum Monthly Payment as of the Cut-off Date;
(14) the original principal amount of the Revolving Credit Loan and, if applicable, the principal balance of the related First Lien as of the date of origination of the Revolving Credit Loan;
(15) the Principal Balance of the Revolving Credit Loan and, if applicable, the principal balance of the related First Lien as of the Cut-off Date;
(16) a code indicating the purpose of the Revolving Credit Loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(17) a code indicating the documentation style (i.e., full, alternative or reduced);
(18) the number of times during the twelve (12) month period preceding the Closing Date that any Minimum Monthly Payment has been received thirty (30) or more days after its Due Date;
(19) the date on which the first payment is due;
(20) a code indicating whether or not the Revolving Credit Loan is the subject of a Cancellation Fee as well as the terms of the Cancellation Fee;
(21) a code indicating the Credit Score of the Mortgagor at the time of origination of the Revolving Credit Loan;
(22) a code indicating the credit grade and specific loan/underwriting program of each Revolving Credit Loan as assigned by the Seller pursuant to the Underwriting Standards;
(23) the first Adjustment Date and the Adjustment Date frequency;
(24) the Gross Margin;
(25) the Maximum Mortgage Interest Rate under the terms of the Mortgage Note;
(26) the Minimum Mortgage Interest Rate under the terms of the Mortgage Note;
(27) the first Adjustment Date immediately following the Cut-off Date;
(28) a code indicating whether the Revolving Credit Loan is a first or second lien Revolving Credit Loan;
(29) the Index;
(30) Credit Limit;
(31) Draw Period;
(32) Amortization Period or repayment period;
(33) Debt to Income Ratio; and
(34) the Due Date.
With respect to the Revolving Credit Loans in the aggregate, the Revolving Credit Loan Schedule shall set forth the following information, as of the Cut-off Date, unless otherwise specified:
(1) the number of Revolving Credit Loans;
(2) the current aggregate principal balance of the Revolving Credit Loans;
(3) the weighted average Mortgage Interest Rate of the Revolving Credit Loans;
(4) the weighted average original months to maturity of the Revolving Credit Loans and the weighted average remaining months to maturity of the Revolving Credit Loans.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
Seller’s Officer’s Certificate: A certificate signed by the Chairman of the Board, President, any Vice President or Treasurer of Seller stating the date by which Seller expects to receive any missing documents sent for recording from the applicable recording office.
Servicer: Greenpoint Mortgage Funding, Inc., in its capacity as servicer, or any successor thereto.
Servicing Advances: All customary, reasonable and necessary “out of pocket” costs and expenses (including reasonable attorneys’ fees and disbursements) incurred in the performance by the Servicer of its servicing obligations, including, but not limited to, the cost of (a) the preservation, restoration and protection of a Mortgaged Property, (b) any enforcement, administrative or judicial proceedings, or any legal work or advice specifically related to servicing the Revolving Credit Loans, including but not limited to, foreclosures, bankruptcies, condemnations, drug seizures, elections, foreclosures by subordinate or superior lienholders, and other legal actions incidental to the servicing of the Revolving Credit Loans (provided that such expenses are reasonable and that the Servicer specifies the Revolving Credit Loan(s) to which such expenses relate, and provided further that any such enforcement, administrative or judicial proceeding does not arise out of a breach of any representation, warranty or covenant of the Seller hereunder), (c) the management and liquidation of any REO Property, (d) taxes, assessments, water rates, sewer rates and other charges which are or may become a lien upon the Mortgaged Property, and fire and hazard insurance coverage, (e) any expenses reasonably sustained by the Servicer, with respect to the liquidation of the Mortgaged Property in accordance with the terms of this Agreement and (f) compliance with the obligations under Section 4.08.
Servicing Fee: With respect to each Revolving Credit Loan and each calendar month, an amount equal to the product of (i) the Servicing Fee Rate divided by 12 and (ii) the Principal Balance of such Revolving Credit Loan as of the first day of such calendar month, prior to giving effect to any principal payments made on such date.
Servicing Fee Rate: 0.50% per annum.
Servicing File: With respect to each Revolving Credit Loan, the documents pertaining thereto specified in Exhibit A-2 and copies of all documents for such Revolving Credit Loan specified in Exhibit A-1.
Servicing Officer: Any officer of the Servicer involved in, or responsible for, the administration and servicing of the Revolving Credit Loans whose name appears on a list of servicing officers furnished by the Servicer to the Purchaser upon request, as such list may from time to time be amended.
Underwriting Standards: As to each Revolving Credit Loan, the Seller’s written underwriting guidelines in effect as of the origination date of the Revolving Credit Loan(s).
Whole Loan Transfer: As defined in Section 11.01(a)(i).
ARTICLE II
SERVICING OF REVOLVING CREDIT LOANS;
RECORD TITLE AND POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
REVOLVING CREDIT LOAN DOCUMENTS
Section 2.01. Agreement to Purchase.
The Seller agrees to sell and the Purchaser agrees to purchase on the Closing Date pursuant to this Agreement and the related Purchase Price and Terms Letter the Revolving Credit Loans, including, without limitation, the Cut-off Date Loan Balances and all Additional Balances, being sold by the Seller and listed on the Revolving Credit Loan Schedule, together with (i) all interest accruing thereon and all collections in respect thereof received after the applicable Cut-off Date; (ii) property which secured a Revolving Credit Loan and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii) the interest of the Seller in any insurance policies in respect of the Revolving Credit Loans; and (iv) all proceeds of the foregoing; provided, however, the Purchaser does not assume the obligation under the Loan Agreements to fund the Draws to the Mortgagors, and the Purchaser shall not be permitted to fund any such Draws. Such conveyance shall be deemed to be made: (1) with respect to the Cut-off Date Loan Balances, as of the applicable Closing Date; and (2) with respect to the amount of each Additional Balance created on or after the Cut-off Date, as of the later of the Closing Date and the date that the corresponding Draw was made pursuant to the related Loan Agreement, subject to the receipt by the Seller of consideration therefore as provided pursuant to Section 2.02. The Seller shall deliver in an electronic format the Revolving Credit Loan Schedule for the Revolving Credit Loans to be purchased on such Closing Date to the Purchaser at least four (4) Business Days prior to such Closing Date.
Section 2.02. Purchase Price.
The Purchase Price for each Revolving Credit Loan shall be equal to the sum of (a) XXX% (subject to adjustment as provided in the Purchase Price and Terms Letter), multiplied by the aggregate Principal Balance of each such Revolving Credit Loan listed on the Revolving Credit Loan Schedule, (b) accrued interest on the aggregate Principal Balance of each Revolving Credit Loan at the related Mortgage Interest Rate less the Servicing Fee Rate of each such Revolving Credit Loan from the day interest was last paid by the Mortgagor to but not including such Closing Date, and (c) in the case of each Additional Balance transferred hereunder created on or after the Cut-off Date, the principal amount of the related Draw under the Loan Agreement (the “Purchase Price”). If so provided in the Purchase Price and Terms Letter, portions of the Revolving Credit Loans shall be priced separately.
The Purchaser shall pay to the Seller on the Closing Date by wire transfer of immediately available funds to a bank account designated by the Seller, the amount specified above in clauses (a) and (b) of the definition of Purchase Price for each Revolving Credit Loan. With respect to each Additional Balance transferred hereunder, the Seller shall fund such Additional Balance and the Purchaser shall pay or cause the Servicer to pay to the Seller, on the day such amount is demanded by the Seller immediately after the funding thereof, the portion of the Purchase Price specified above in clause (c) for such Additional Balance pursuant to Section 4.05(v) hereof in an amount equal to the related Draw and if the amount on deposit in the Custodial Account is insufficient, the Purchaser shall remit the amount of such insufficiency directly to the Seller in accordance with Section 5.01 herein.
Section 2.03. Servicing of Revolving Credit Loans.
On the Closing Date, the Revolving Credit Loans will be sold by the Seller to the Purchaser on a servicing retained basis.
Simultaneously with the execution and delivery of this Agreement, the Servicer hereby agrees to service the Revolving Credit Loans listed on the Revolving Credit Loan Schedule for the benefit of the Purchaser in accordance with Accepted Servicing Practices and this Agreement.
Section 2.04. Record Title and Possession of Mortgage Files; Maintenance of Servicing Files.
In accordance with Section 2.07, the Seller shall deliver at its own expense, the Mortgage Files for the related Revolving Credit Loans to Purchaser or its designee. In addition, on or before the Closing Date, the Seller shall deliver at its own expense, the related Servicing Files for the related Revolving Credit Loans to the Servicer. The possession of each Servicing File by the Servicer is at the will of the Purchaser, for the sole purpose of servicing the related Revolving Credit Loan, and such retention and possession by the Servicer is in a custodial capacity only. From the Closing Date, the ownership of each related Revolving Credit Loan, including the Mortgage Note, the Mortgage, the contents of the related Mortgage File and all rights, benefits, proceeds and obligations arising therefrom or in connection therewith, has been vested in the Purchaser. All rights arising out of the Revolving Credit Loans including, but not limited to, all funds received on or in connection with the Revolving Credit Loans and all records or documents with respect to the Revolving Credit Loans prepared by or which come into the possession of the Seller shall be received and held by the Seller in trust for the benefit of the Purchaser as the owner of the Revolving Credit Loans. Any portion of the Mortgage Files retained by the Seller shall be appropriately identified in the Seller’s computer system to clearly reflect the ownership of the Revolving Credit Loans by the Purchaser. The Servicer shall release its custody of the contents of the Servicing Files only in accordance with written instructions of the Purchaser, except when such release is required as incidental to the Servicer’s servicing of the Revolving Credit Loans or is in connection with a repurchase of any Revolving Credit Loan or Loans with respect thereto pursuant to this Agreement, such written instructions shall not be required.
Section 2.05. Books and Records.
The sale of each Revolving Credit Loan will be reflected on the Seller’s balance sheet and other financial statements as a sale of assets by the Seller. The Seller shall maintain a complete set of books and records for the Revolving Credit Loans sold by it which shall be appropriately identified in the Seller’s computer system to clearly reflect the ownership of the Revolving Credit Loans by the Purchaser. In particular, the Seller shall maintain in its possession, available for inspection by the Purchaser, or its designee and shall deliver to the Purchaser upon demand, evidence of compliance with all federal, state and local laws, rules and regulations, and requirements of Fannie Mae or Freddie Mac, as applicable, including but not limited to documentation as to the method used in determining the applicability of the provisions of the Flood Disaster Protection Act of 1973, as amended, to the Mortgaged Property, documentation evidencing insurance coverage and eligibility of any condominium project for approval by Seller and periodic inspection reports as required by Section 4.13. To the extent that original documents are not required for purposes of realization of Liquidation Proceeds or Insurance Proceeds, documents maintained by the Seller may be in the form of microfilm or microfiche or such other reliable means of recreating original documents, including but not limited to, optical imagery techniques so long as the Seller complies with the requirements of the Fannie Mae Guides.
In addition to the foregoing, the Seller shall provide to any supervisory agents or examiners that regulate the Purchaser, including but not limited to, the OTS, the FDIC and other similar entities, access, during normal business hours, upon reasonable advance notice to the Seller and without charge to the Seller or such supervisory agents or examiners, to any documentation regarding the Revolving Credit Loans that may be required by any applicable regulator.
Section 2.06. Transfer of Revolving Credit Loans.
The Seller and Servicer shall keep at its office books and records in which, subject to such reasonable regulations as it may prescribe, the Seller and Servicer shall note transfers of Revolving Credit Loans. No transfer of a Revolving Credit Loan may be made unless such transfer is in compliance with the terms of Section 11.01 or 12.12. For the purposes of this Agreement, the Seller and Servicer shall be under no obligation to deal with any person with respect to this Agreement or any Revolving Credit Loan unless a properly executed Assignment, Assumption and Recognition Agreement in the form of Exhibit D with respect to such Revolving Credit Loan has been delivered to the Seller and Servicer. Upon receipt of notice of the transfer, the Seller and Servicer shall mark its books and records to reflect the ownership of the Revolving Credit Loans by such assignee, and the previous Purchaser shall be released from its obligations hereunder with respect to the Revolving Credit Loans sold or transferred.
Section 2.07. Delivery of Revolving Credit Loan Documents.
The Seller shall deliver and release to the Purchaser or its designee the Revolving Credit Loan Documents no later than four (4) Business Days prior to the Closing Date pursuant to a bailee letter agreement. If the Seller cannot deliver the original recorded Revolving Credit Loan Documents on the Closing Date, the Seller shall, promptly upon receipt thereof and in any case not later than 90 days from the Closing Date, deliver such original recorded documents to the Purchaser or its designee (unless the Seller is delayed in making such delivery by reason of the fact that such documents shall not have been returned by the appropriate recording office). If delivery is not completed within 90 days of the Closing Date solely because such documents shall not have been returned by the appropriate recording office, Seller shall deliver such document to Purchaser, or its designee, within such time period as specified in a Seller’s Officer’s Certificate. In the event that documents have not been received by the date specified in the Seller’s Officer’s Certificate, a subsequent Seller’s Officer’s Certificate shall be delivered by such date specified in the prior Seller’s Officer’s Certificate, stating a revised date for receipt of documentation. The procedure shall be repeated until the documents have been received and delivered. The Seller shall use its best efforts to effect delivery of all delayed recorded documents within 120 days of the Closing Date.
Pursuant to Section 12.11, the Seller shall be responsible for recording the Assignments of Mortgage. The Seller shall pay all initial recording fees, for the Assignments of Mortgage and any other fees in connection with the transfer of the Revolving Credit Loan Documents to the Purchaser or its designee.
Any review by the Purchaser or its designee of the Mortgage Files shall in no way alter or reduce the Seller’s obligations hereunder.
If the Purchaser or its designee discovers any defect with respect to any document constituting part of a Mortgage File, the Purchaser shall, or shall cause its designee to, give written specification of such defect to the Seller and the Seller shall cure or repurchase such Revolving Credit Loan in accordance with Section 3.03.
The Servicer shall forward to the Purchaser or its designee, original documents evidencing an assumption, modification, consolidation or extension of any Revolving Credit Loan entered into in accordance with Section 4.01 or 6.01 within one week of their execution and shall also provide the original of any document submitted for recordation or a copy of such document certified by the appropriate public recording office to be a true and complete copy of the original within five (5) days of its return from the appropriate public recording office.
Section 2.08. Quality Control Procedures.
The Seller must have an internal quality control program that verifies, on a regular basis, the existence and accuracy of the legal documents, credit documents, property appraisals, and underwriting decisions. The program must be capable of evaluating and monitoring the overall quality of its loan production and servicing activities. The program is to ensure that the Revolving Credit Loans are originated and serviced in accordance with all applicable law, prudent mortgage banking practices and accounting principles and the terms of the Revolving Credit Loan Documents; guard against dishonest, fraudulent, or negligent acts; and guard against errors and omissions by officers, employees, or other authorized persons.
Section 2.09. Closing.
The closing for the purchase and sale of the Revolving Credit Loans shall take place on the Closing Date. The closing shall be either: by telephone, confirmed by letter or wire as the parties shall agree, or conducted in person, at such place as the parties shall agree.
The closing for the Revolving Credit Loans to be purchased on the Closing Date shall be subject to each of the following conditions:
(a)	at least two (2) Business Days prior to the Closing Date, the Seller shall deliver to the Purchaser a magnetic diskette, or transmit by modem or e-mail, a listing on a loan-level basis of the information contained in the Revolving Credit Loan Schedule;
(b)
all of the representations and warranties of the Seller and the Servicer under this Agreement shall be true and correct as of the Closing Date or, with respect to representations and warranties made as of a date other than the Closing Date, as of such date, and no event shall have occurred which, with notice or the passage of time, would constitute a material default under this Agreement;
(c)	the Purchaser shall have received, or the Purchaser’s attorneys shall have received in escrow, all closing documents, in such forms as are agreed upon and acceptable to the Purchaser, duly executed by all signatories other than the Purchaser as required pursuant to the terms hereof;
(d)	the Seller and the Servicer shall have delivered and released to the Purchaser (or its designee) on or prior to the Closing Date all documents required pursuant to the terms of this Agreement; and
(e)	all other terms and conditions of this Agreement and the Purchase Price and Terms Letters shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the Seller on the Closing Date the portion of the Purchase Price required to be paid pursuant to Section 2.02 of this Agreement on such date, by wire transfer of immediately available funds to the account designated by the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE SELLER AND THE SERVICER; REPURCHASE; REVIEW OF REVOLVING CREDIT LOANS
Section 3.01. Representations and Warranties of the Seller and the Servicer.
Greenpoint Mortgage Funding, Inc., in its capacity as Seller and Servicer (for the purposes of this Section 3.01 only, the “Company”) represents, warrants and covenants to the Purchaser that as of the Closing Date or as of such date specifically provided herein:
(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all licenses necessary to carry out its business as now being conducted, and is licensed and qualified to transact business in and is in good standing under the laws of each state in which any Mortgaged Property is located or is otherwise exempt under applicable law from such licensing or qualification or is otherwise not required under applicable law to effect such licensing or qualification and no demand for such licensing or qualification has been made upon the Company by any such state, and in any event the Company is in compliance with the laws of any such state to the extent necessary to ensure the enforceability of each Revolving Credit Loan and the servicing of the Revolving Credit Loans in accordance with the terms of this Agreement;
(b) The Company has the full power and authority and legal right to hold, transfer and convey each Revolving Credit Loan, to sell each Revolving Credit Loan and to execute, deliver and perform, and to enter into and consummate all transactions contemplated by this Agreement and the related Purchase Price and Terms Letter and to conduct its business as presently conducted; the Company has duly authorized the execution, delivery and performance of this Agreement and any agreements contemplated hereby, has duly executed and delivered this Agreement and the related Purchase Price and Terms Letter, and any agreements contemplated hereby, and this Agreement and the related Purchase Price and Terms Letter and each Assignment to the Purchaser and any agreements contemplated hereby, constitute the legal, valid and binding obligations of the Company, enforceable against it in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization and similar laws, and by equitable principles affecting the enforceability of the rights of creditors; and all requisite corporate action has been taken by the Company to make this Agreement, the related Purchase Price and Terms Letter and all agreements contemplated hereby valid and binding upon the Company in accordance with their terms;
(c) Neither the execution and delivery of this Agreement, the related Purchase Price and Terms Letter, the sale of the Revolving Credit Loans to the Purchaser, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement and the related Purchase Price and Terms Letter will conflict with any of the terms, conditions or provisions of the Company’s charter or by-laws or materially conflict with or result in a material breach of any of the terms, conditions or provisions of any legal restriction or any agreement or instrument to which the Company is now a party or by which it is bound, or constitute a default or result in an acceleration under any of the foregoing, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Company or its property is subject;
(d) There is no litigation, suit, proceeding or investigation pending or threatened, or any order or decree outstanding, with respect to the Company which is reasonably likely to have a material adverse effect on the sale of the Revolving Credit Loans, the execution, delivery, performance or enforceability of this Agreement or the related Purchase Price and Terms Letter, or which is reasonably likely to have a material adverse effect on the financial condition of the Company;
(e) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Company of or compliance by the Company with this Agreement and the related Purchase Price and Terms Letter, except for consents, approvals, authorizations and orders which have been obtained;
(f) The consummation of the transactions contemplated by this Agreement and the related Purchase Price and Terms Letter are in the ordinary course of business of the Company, and the transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by the Company pursuant to this Agreement and the related Purchase Price and Terms Letter are not subject to bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction;
(g) The origination and servicing practices used by the Company or the originator and any prior servicer with respect to each Mortgage Note and Mortgage have been legal and in accordance with applicable laws and regulations, and in all material respects proper and prudent in the mortgage origination and servicing business. With respect to escrow deposits and payments that the Company is entitled to collect, all such payments are in the possession of, or under the control of, the Company, and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All escrow payments have been collected in full compliance with applicable state and federal law and the provisions of the related Mortgage Note and Mortgage. As to any Revolving Credit Loan that is the subject of an escrow, escrow of funds is not prohibited by applicable law and has been established in an amount sufficient to pay for every escrowed item that remains unpaid and has been assessed but is not yet due and payable. No escrow deposits or other charges or payments due under the Mortgage Note have been capitalized under any Mortgage or the related Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict compliance with state and federal law and the terms of the related Mortgage Note. Any interest required to be paid pursuant to state and local law has been properly paid and credited;
(h) The Company has not used selection procedures that identified the Revolving Credit Loans as being less desirable or valuable than other comparable Revolving Credit Loans in the Company’s portfolio at the Cut-off Date;
(i) The Company will treat the sale of the Revolving Credit Loans to the Purchaser as a sale for reporting and accounting purposes and, to the extent appropriate, for federal income tax purposes;
(j) The Company is an approved seller/servicer of residential Revolving Credit Loans for Fannie Mae or Freddie Mac and HUD, with such facilities, procedures and personnel necessary for the sound servicing of such Revolving Credit Loans. The Company is duly qualified, licensed, registered and otherwise authorized under all applicable federal, state and local laws, and regulations, meets the minimum capital requirements, if applicable, set forth by the OCC, and is in good standing to sell Revolving Credit Loans to and service Revolving Credit Loans for Fannie Mae or Freddie Mac and no event has occurred which would make the Company unable to comply with eligibility requirements or which would require notification to either Fannie Mae or Freddie Mac;
(k) The Company does not believe, nor does it have any cause or reason to believe, that it cannot perform each and every covenant contained in this Agreement and the related Purchase Price and Terms Letter. The Company is solvent and the sale of the Revolving Credit Loans will not cause the Company to become insolvent. The sale of the Revolving Credit Loans is not undertaken with the intent to hinder, delay or defraud any of the Company’s creditors;
(l) No statement, tape, diskette, form, report or other document prepared by, or on behalf of, the Company pursuant to this Agreement, the related Purchase Price and Terms Letter or in connection with the transactions contemplated hereby, contains or will contain any statement that is or will be inaccurate or misleading in any material respect. The Company has prudently originated and underwritten each Revolving Credit Loan;
(m) The Company acknowledges and agrees that the Servicing Fee represents reasonable compensation for performing such services and that the entire Servicing Fee shall be treated by the Company, for accounting and tax purposes, as compensation for the servicing and administration of the Revolving Credit Loans pursuant to this Agreement;
(n) The Company has delivered to the Purchaser financial statements as to its last two complete fiscal years. All such financial statements fairly present the pertinent results of operations and changes in financial position for each of such periods and the financial position at the end of each such period of the Company and its subsidiaries and have been prepared in accordance with GAAP consistently applied throughout the periods involved, except as set forth in the notes thereto. There has been no change in the business, operations, financial condition, properties or assets of the Company since the date of the Company’s financial statements that would have a material adverse effect on its ability to perform its obligations under this Agreement or the related Purchase Price and Terms Letter;
(o) The Company has not dealt with any broker, investment banker, agent or other person that may be entitled to any commission or compensation in connection with the sale of the Revolving Credit Loans;
(p) The Company has complied with all applicable anti- money laundering laws and regulations, including without limitation the USA Patriot Act of 2001; and
(q) The Company has complied with all applicable laws prohibiting lending discrimination and predatory, unfair or deceptive practices.
Section 3.02. Representations and Warranties as to Individual Revolving Credit Loans.
The Seller hereby represents and warrants to the Purchaser, as to each Revolving Credit Loan, as of the Closing Date as follows:
(a) The information set forth in the Revolving Credit Loan Schedule, including any diskette or other related data tapes sent to the Purchaser, is complete, true and correct in all material respects as of the Cut-off Date;
(b) The Mortgage creates a first or second lien or a first or second priority ownership interest in an estate in fee simple in real property securing the related Mortgage Note;
(c) All payments due on or prior to the Cut-off Date for such Revolving Credit Loan have been made as of the Closing Date, the Revolving Credit Loan is not delinquent in payment more than 29 days and has not been dishonored; there are no material defaults under the terms of the Revolving Credit Loan; the Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the owner of the Mortgaged Property subject to the Mortgage, directly or indirectly, for the payment of any amount required by the Revolving Credit Loan; and no payment has been 30 days delinquent during the preceding twelve-month period;
(d) All taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or escrow funds have been established in an amount sufficient to pay for every such escrowed item which remains unpaid and which has been assessed but is not yet due and payable;
(e) The terms of the Mortgage Note and the Mortgage have not been impaired, waived, altered or modified in any respect, except by written instruments which have been recorded to the extent any such recordation is required by law, or, necessary to protect the interest of the Purchaser. No instrument of waiver, alteration or modification has been executed, and no Mortgagor has been released, in whole or in part, from the terms thereof except in connection with an assumption agreement and which assumption agreement is part of the Mortgage File and the terms of which are reflected in the Revolving Credit Loan Schedule; the substance of any such waiver, alteration or modification has been approved by the issuer of any related title insurance policy, to the extent required by the related policies;
(f) The Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render the Mortgage Note or Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto; and the Mortgagor was not a debtor in any state or federal bankruptcy or insolvency proceeding at the time the Revolving Credit Loan was originated;
(g) All buildings or other customarily insured improvements upon the Mortgaged Property are insured by an insurer acceptable under the Fannie Mae Guides, against loss by fire, hazards of extended coverage and such other hazards as are provided for in the Fannie Mae Guides or by Freddie Mac, as well as all additional requirements set forth in Section 4.10 of this Agreement. All such standard hazard policies are in full force and effect and on the date of origination contained a standard mortgagee clause naming the Seller and its successors in interest and assigns as loss payee and such clause is still in effect and all premiums due thereon have been paid. If required by the Flood Disaster Protection Act of 1973, as amended, the Revolving Credit Loan is covered by a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration which policy conforms to Fannie Mae and Freddie Mac requirements, as well as all additional requirements set forth in Section 4.10 of this Agreement. Such policy was issued by an insurer acceptable under Fannie Mae or Freddie Mac guidelines. The Mortgage obligates the Mortgagor thereunder to maintain all such insurance at the Mortgagor’s cost and expense, and upon the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to maintain such insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor from the Mortgagor;
(h) Each Revolving Credit Loan at the time it was made complied in all material respects with applicable federal, state or local law including, without limitation, usury, truth-in-lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, disclosure and predatory and abusive lending laws applicable to such Revolving Credit Loan;
(i) The Mortgage has not been satisfied, canceled or subordinated, in whole or in part, or rescinded, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission. The Seller has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Revolving Credit Loan to be in default, nor has the Seller waived any default resulting, from any action or inaction by the Mortgagor;
(j) With respect to any first lien Revolving Credit Loan, the related Mortgage is a valid, subsisting, enforceable and perfected first lien on the Mortgaged Property and, with respect to any second lien Revolving Credit Loan, the related Mortgage is a valid, subsisting, enforceable and perfected second lien on the Mortgaged Property, including all buildings on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems affixed to such buildings, and all additions, alterations and replacements made at any time with respect to the foregoing securing the Mortgage Note’s original principal balance. The Mortgage and the Mortgage Note do not contain any evidence of any security interest or other interest or right thereto. Such lien is free and clear of all adverse claims, liens and encumbrances having priority over the first or second lien, as applicable, of the Mortgage subject only to (1) with respect to any second lien Revolving Credit Loan, the related First Lien, (2) the lien of non-delinquent current real property taxes and assessments not yet due and payable, (3) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording which are acceptable to mortgage lending institutions generally and (A) are referred to in the lender’s title insurance policy, or (B) do not adversely affect the market value of the Mortgaged Property or the intended use of the Mortgaged Property, and (4) other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property. Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Revolving Credit Loan establishes and creates (1) with respect to any first lien Revolving Credit Loan, a valid, subsisting, enforceable and perfected first lien and first priority security interest and (2) with respect to any second lien Revolving Credit Loan, a valid, subsisting, enforceable and perfected second lien and second priority security interest, in each case, on the property described therein, and the Seller has the full right to sell and assign the same to the Purchaser;
(k) The Mortgage Note and the related Mortgage are original and genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in all respects in accordance with its terms subject to bankruptcy, insolvency, moratorium, reorganization and other laws of general application affecting the rights of creditors and by general equitable principles and the Seller has taken all action necessary to transfer such rights of enforceability to the Purchaser. All parties to the Mortgage Note and the Mortgage had the legal capacity to enter into the Revolving Credit Loan and to execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and the Mortgage have been duly and properly executed by such parties. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Revolving Credit Loan has taken place on the part of Seller or the Mortgagor, or, on the part of any other party involved in the origination of the Revolving Credit Loan. The proceeds of the Revolving Credit Loan have been fully disbursed and there is no requirement for future advances thereunder, and any and all requirements as to completion of any on-site or off-site improvements and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the Revolving Credit Loan and the recording of the Mortgage were paid or are in the process of being paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage;
(l) The Seller is the sole owner of record and holder of the Revolving Credit Loan and the indebtedness evidenced by the Mortgage Note, and upon recordation the Purchaser or its designee will be the owner of record of the Mortgage and the indebtedness evidenced by the Mortgage Note, and upon the sale of the Revolving Credit Loan to the Purchaser, the Servicer will retain the Servicing File in trust for benefit of the Purchaser only for the purpose of servicing and supervising the servicing of the Revolving Credit Loan. Immediately prior to the transfer and assignment to the Purchaser on the Closing Date, the Revolving Credit Loan, including the Mortgage Note and the Mortgage, were not subject to an assignment or pledge, and the Seller had good and marketable title to and was the sole owner thereof and had full right to transfer and sell the Revolving Credit Loan to the Purchaser free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest and has the full right and authority subject to no interest or participation of, or agreement with, any other party, to sell and assign the Revolving Credit Loan pursuant to this Agreement and following the sale of the Revolving Credit Loan, the Purchaser will own such Revolving Credit Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest. The Seller intends to relinquish all rights to possess, control and monitor the Revolving Credit Loan, except for the purposes of servicing the Revolving Credit Loan as set forth in this Agreement;
(m) With respect to each Revolving Credit Loan, a lender’s policy of title insurance, expressClose.com lender master protection program (standard mortgage guaranty) or a commitment letter (binder) to issue the same or an attorney’s certificate or opinion of title was effective on the date of the origination of each Revolving Credit Loan and each such policy or certificate or opinion of title is valid and remains in full force and effect. Such lender’s policy of title insurance is acceptable to Fannie Mae and Freddie Mac, issued by a title insurer acceptable to Fannie Mae and Freddie Mac and qualified to do business in the jurisdiction where the related Mortgaged Property is located, insuring (subject to the exceptions contained in clauses (j)(3)(A) and (B) above) the Seller, its successors and assigns as to the lien priority specified on the Revolving Credit Loan Schedule with respect to the related Mortgage in the original principal amount of such Revolving Credit Loan and against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of such Mortgage providing for adjustment to the applicable Mortgage Interest Rate and Monthly Payment. Additionally, either such lender’s title insurance policy affirmatively insures that there is ingress and egress to and from the Mortgaged Property or the Seller warrants that there is ingress and egress to and from the Mortgaged Property and the lender’ s title insurance policy affirmatively insures against encroachments by or upon the related Mortgaged Property or any interest therein or any other adverse circumstance that either is disclosed or would have been disclosed by an accurate survey. The Seller is the sole insured of such lender’s title insurance policy, and such lender’s title insurance policy is in full force and effect and will be in full force and effect upon the consummation of the transactions contemplated by this Agreement and will inure to the benefit of the Purchaser without any further act. No claims have been made under such lender’s title insurance policy, neither the Seller, any prior holder of the related Mortgage has done, by act or omission, anything that would impair the coverage of such lender’s insurance policy, and there is no act, omission, condition, or information that would impair the coverage of such lender’s insurance policy;
(n) There is no default, breach, violation or event of acceleration existing under the Mortgage or the related Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event permitting acceleration; and neither the Seller nor any prior mortgagee has waived any default, breach, violation or event permitting acceleration. With respect to each second lien Revolving Credit Loan, (i) the First Lien is in full force and effect, (ii) there is no default, breach, violation or event of acceleration existing under such prior mortgage or the related mortgage note, (iii) no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration thereunder, and either (A) the prior mortgage contains a provision which allows or (B) applicable law requires, the mortgagee under the second lien Revolving Credit Loan to receive notice of, and affords such mortgagee an opportunity to cure any default by payment in full or otherwise under the prior mortgage;
(o) There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under law could give rise to such liens) affecting the related Mortgaged Property which are or may be liens prior to or equal to the lien of the related Mortgage;
(p) All improvements subject to the Mortgage which were considered in determining the appraised value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property (and wholly within the project with respect to a condominium unit) and no improvements on adjoining properties encroach upon the Mortgaged Property except those which are insured against by the title insurance policy referred to in clause (m) above and all improvements on the property comply with all applicable zoning and subdivision laws and ordinances;
(q) The Revolving Credit Loan was originated by or for the Seller. The Revolving Credit Loan complies with all the terms, conditions and requirements of the Seller’s Underwriting Standards in effect at the time of origination of such Revolving Credit Loan. The Mortgage Notes and Mortgages (exclusive of any riders) are on forms generally acceptable to Fannie Mae or Freddie Mac. Seller is currently selling loans to Fannie Mae and/or Freddie Mac which are the same document forms as the Mortgage Notes and Mortgages (inclusive of any riders). The Revolving Credit Loan bears interest at the Mortgage Interest Rate as set forth in the Revolving Credit Loan Schedule, and Minimum Monthly Payments under the Mortgage Note are due and payable on the first day of each month. The Mortgage contains the usual and enforceable provisions of the originator at the time of origination for the acceleration of the payment of the unpaid principal amount of the Revolving Credit Loan if the related Mortgaged Property is sold without the prior consent of the mortgagee thereunder;
(r) The Mortgaged Property is not subject to any material damage by waste, fire, earthquake, windstorm, flood or other casualty. At origination of the Revolving Credit Loan there was, and there currently is, no proceeding pending for the total or partial condemnation of the Mortgaged Property. There have not been any condemnation proceedings with respect to the Mortgaged Property and there are no such proceedings scheduled to commence at a future date. To the best of the Seller’s knowledge, no Revolving Credit Loan is subject to any litigation as of the date hereof;
(s) The related Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby. There is no homestead or other exemption available to the Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage;
(t) If the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified if required under applicable law to act as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Purchaser to the trustee under the deed of trust, except in connection with a trustee’s sale or attempted sale after default by the Mortgagor;
(u) The Mortgage File contains an appraisal of the related Mortgaged Property signed prior to the final approval of the Revolving Credit Loan application by a Qualified Appraiser, who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Revolving Credit Loan, and the appraisal and appraiser both satisfy the requirements of Fannie Mae and Freddie Mac and Title XI of FIRREA and the regulations promulgated thereunder, all as in effect on the date the Revolving Credit Loan was originated. The appraisal is in a form acceptable to Fannie Mae or Freddie Mac;
(v) All parties which have had any interest in the Mortgage, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (A) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (B) (1) organized under the laws of such state, or (2) qualified to do business in such state, or (3) federal savings and loan associations or national banks or a Federal Home Loan Bank or savings bank having principal offices in such state, or (4) not doing business in such state;
(w) The related Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to above and such collateral does not serve as security for any other obligation;
(x) The Mortgagor has received all disclosure materials required by applicable law with respect to the making of such Revolving Credit Loans;
(y) The Revolving Credit Loan does not contain “graduated payment” features; to the extent any Revolving Credit Loan contains any buydown provision, such buydown funds have been maintained and administered in accordance with, and such Revolving Credit Loan otherwise complies with, Fannie Mae/Freddie Mac requirements relating to buydown loans;
(z) The Mortgagor is not in bankruptcy and, the Mortgagor is not insolvent or in bankruptcy and the Seller has no knowledge of any circumstances or condition with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit standing that could reasonably be expected to cause investors to regard the Revolving Credit Loan as an unacceptable investment, cause the Revolving Credit Loan to become delinquent, or materially adversely affect the value or marketability of the Revolving Credit Loan;
(aa) The Minimum Monthly Payment with respect to any Revolving Credit Loan is not less than the interest accrued at the applicable Mortgage Interest Rate on the average daily Principal Balance during the Billing Cycle relating to the date on which such Minimum Monthly Payment is due;
(bb) With respect to each Revolving Credit Loan, that is not a MERS Loan, the related Assignment, is in recordable form and (other than with respect to the blank assignee) is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located and, when endorsed as provided for in this Agreement, the Mortgage Notes will be duly endorsed under applicable law, and with respect to each Revolving Credit Loan that is a MERS Loan, such Revolving Credit Loan is recorded on the MERS System;
(cc) As to Revolving Credit Loans that are not secured by an interest in a leasehold estate, the Mortgaged Property is located in the state identified in the Revolving Credit Loan Schedule and consists of a single parcel of real property with a detached single family residence erected thereon, or a townhouse, or a two- to four-family dwelling, or an individual condominium unit in a condominium project, or an individual unit in a planned unit development or a de minimis planned unit development, provided, however, that no residence or dwelling is a single parcel of real property with a cooperative housing corporation erected thereon, or a mobile home. As of the date of origination, no portion of the Mortgaged Property was used for commercial purposes, and since the date of origination no portion of the Mortgaged Property has been used for commercial purposes;
(dd) Each Revolving Credit Loan accrues interest at an adjustable Mortgage Interest Rate computed on the actual number of days in a Billing Cycle and a 365-day year. Each Mortgage Interest Rate adjusts monthly (except during a three month initial period) to equal the sum of the applicable Index and the Gross Margin, subject to a Maximum Mortgage Interest Rate and a Minimum Mortgage Interest Rate;
(ee) Each Revolving Credit Loan requires the payment of a Cancellation Fee, where applicable;
(ff) Each Revolving Credit Loan has an original term to maturity of either 180 months or 300 months. Each Revolving Credit Loan has a Draw Period of either 5 or 15 years followed by an Amortization Period of ten years;
(gg) As of the Closing Date, the Mortgaged Property was lawfully occupied under applicable law, and all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities;
(hh) If the Mortgaged Property is a condominium unit or a planned unit development (other than a de minimis planned unit development), such condominium or planned unit development project meets the Seller’s eligibility requirements as set forth in Seller’s Underwriting Standards;
(ii) There is no pending action or proceeding directly involving the Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue; there is no violation of any environmental law, rule or regulation with respect to the Mortgaged Property; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to use and enjoyment of said property;
(jj) The Mortgagor has not notified the Seller, and the Seller has no knowledge of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act of 2003;
(kk) No Revolving Credit Loan was made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged Property;
(ll) Each Revolving Credit Loan has been serviced in all material respects in compliance with Accepted Servicing Practices applicable law and the terms of the related Revolving Credit Loan Documents;
(mm) The Revolving Credit Loan was originated by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or similar institution which is supervised and examined by a federal or state authority;
(nn) With respect to any ground lease to which a Mortgaged Property may be subject: (i) a true, correct and complete copy of the ground lease and all amendments, modifications and supplements thereto is included in the Servicing File, and the Mortgagor is the owner of a valid and subsisting leasehold interest under such ground lease; (ii) such ground lease is in full force and effect, unmodified and not supplemented by any writing or otherwise except as contained in the Mortgage File; (iii) all rent, additional rent and other charges reserved therein have been fully paid to the extent payable as of the Closing Date; (iv) the Mortgagor enjoys the quiet and peaceful possession of the leasehold estate, subject to any sublease; (v) the Mortgagor is not in default under any of the terms of such ground lease, and there are no circumstances which, with the passage of time or the giving of notice, or both, would result in a default under such ground lease; (vi) the lessor under such ground lease is not in default under any of the terms or provisions of such ground lease on the part of the lessor to be observed or performed; (vii) the lessor under such ground lease has satisfied any repair or construction obligations due as of the Closing Date pursuant to the terms of such ground lease; (viii) the execution, delivery and performance of the Mortgage do not require the consent (other than those consents which have been obtained and are in full force and effect) under, and will not contravene any provision of or cause a default under, such ground lease; (ix) the ground lease term extends, or is automatically renewable, for at least five years beyond the maturity date of the related Revolving Credit Loan; and (x) the Purchaser has the right to cure defaults on the ground lease;
(oo) With respect to any broker fees collected and paid on any of the Revolving Credit Loans, all broker fees have been properly assessed to the Mortgagor and no claims will arise as to broker fees that are double charged and for which the Mortgagor would be entitled to reimbursement;
(pp) With respect to any Revolving Credit Loan as to which an affidavit has been delivered to the Purchaser certifying that the original Mortgage Note has been lost or destroyed and not been replaced, if such Revolving Credit Loan is subsequently in default, the enforcement of such Revolving Credit Loan will not be materially adversely affected by the absence of the original Mortgage Note; provided, however, that no more than 1% of the Revolving Credit Loans, in the aggregate, have lost note affidavits.
(qq) Each Revolving Credit Loan constitutes a qualified mortgage under Section 860G(a)(3)(A) of the Code and Treasury Regulations Section 1.860G-2(a)(1);
(rr) Except as provided in Section 2.07, the Mortgage Note, the Mortgage, the Assignment and the other documents set forth in Exhibit A-1 and required to be delivered on the related Closing Date have been delivered to the Purchaser or its designee;
(ss) All information supplied by, on behalf of, or concerning the Mortgagor is true, accurate and complete and does not contain any statement that is or will be inaccurate or misleading in any material respect;
(tt) There does not exist on the related Mortgaged Property any hazardous substances, hazardous wastes or solid wastes, as such terms are defined in the Comprehensive Environmental Response Compensation and Liability Act, the Resource Conservation and Recovery Act of 1976, or other federal, state or local environmental legislation;
(uu) The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by applicable law with respect to the making of Revolving Credit Loans. The Servicer shall maintain such statement in the Servicing File;
(vv) No Revolving Credit Loan has an LTV or CLTV, as applicable, in excess of 100% and no second lien Revolving Credit Loan has an Equity LTV in excess of 100%;
(ww) Either (a) no consent for the second lien Revolving Credit Loan is required by the holder of the related First Lien or (b) such consent has been obtained and is contained in the Mortgage File.
(xx) The Seller has not received notice of: (1) any proceeding for the total or partial condemnation of any Mortgaged Property, (2) any subsequent, intervening mortgage, lien, attachment, lis pendens or other encumbrance affecting any Mortgaged Property or (3) with respect to any second lien Revolving Credit Loan, any default under any mortgage, lien or other encumbrance senior to each Mortgage;
(yy) With respect to any second lien Revolving Credit Loan and where required or customary in the jurisdiction in which the Mortgaged Property is located, the original lender has filed for record a request for notice of any action by the senior lienholder under the related First Lien, and the original lender has notified any senior lienholder in writing of the existence of the related second lien Revolving Credit Loan and requested notification of any action to be taken against the Mortgagor by the senior lienholder;
(zz) With respect to each Revolving Credit Loan that has a Prepayment Penalty feature, each such Prepayment Penalty is enforceable and each Prepayment Penalty is permitted pursuant to applicable federal, state and local law, subject to federal preemption where applicable;
(aaa) (i) None of the Revolving Credit Loans are (a) loans subject to 12 CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation Z, the regulation implementing TILA, which implements the Home Ownership and Equity Protection Act of 1994 (“HOEPA”), as amended, (b) classified and/or defined as a “high cost,” “high risk,” “threshold,” “covered,” or “predatory” loan under any other applicable state, federal or local law, including, but not limited to, the States of Georgia, New York, North Carolina or the City of New York or (c) subject to the New Jersey Home Ownership Security Act of 2002 (the “Act”), unless such Revolving Credit Loan is a (1) “Home Loan” as defined in the Act that is (A) a first lien purchase money mortgage loan, which is not a “High Cost Home Loan” as defined in the Act or (B) a rate and term refinance as set forth in the Seller’s Underwriting Standards which is not a “High Cost Home Loan”, or (2) “Covered Home Loan” as defined in the Act that is a first lien purchase money mortgage loan, which is not a High Cost Home Loan under the Act and (ii) no Revolving Credit Loan is subject to the Home Ownership and Equity Protection Act of 1994 or any comparable state, federal or local law;
(bbb) No Revolving Credit Loan that was originated on or after October 1, 2002 and before March 7, 2003 is secured by a Mortgaged Property located in the State of Georgia;
(ccc) As of the Closing Date, with respect to any second lien Revolving Credit Loan, the Seller has not received a notice of default of a First Lien which has not been cured;
(ddd) No Mortgagor was encouraged or required to select a Revolving Credit Loan product offered by the originator that is a higher-cost product designed for less creditworthy borrowers, unless at the time of the loan’s origination such Mortgagor did not qualify (taking into account credit history and debit-to-income ratios) for a lower cost credit product then offered by the originator of the Revolving Credit Loan;
(eee) The methodology used in underwriting the extension of credit for each Revolving Credit Loan does not rely on the extent of the Mortgagor's equity in the collateral as the principal determining factor in approving such credit extension. Such underwriting methodology confirmed that at the time of origination, the Mortgagor had a reasonable ability to make timely payments on the Revolving Credit Loan;
(fff) All points and fees related to each Revolving Credit Loan were disclosed in writing to the related Mortgagor in accordance with applicable state and federal law and regulations. No Mortgagor was charged points and fees (whether or not financed) in an amount that exceeds the limits described in Fannie Mae’s anti-predatory lending requirements as set forth in the Fannie Mae Guides;
(ggg) No Revolving Credit Loan is subject to negative amortization;
(hhh) No Revolving Credit Loan was originated for the purpose of the proceeds of such Revolving Credit Loan being used to finance single-premium credit life insurance policies;
(iii) The Servicer has fully furnished in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information on the Mortgagor credit files to Equifax, Experian and Trans Union Credit Information Company on a monthly basis.
Section 3.03. Repurchase; Substitution.
It is understood and agreed that the representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of the Revolving Credit Loans, delivery of the Mortgage Files to the Purchaser or its designee and the transfer of the servicing rights associated with such Revolving Credit Loans, and shall inure to the benefit of the Purchaser and its successors and assigns, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination, or lack of examination, of any Revolving Credit Loan Document. Upon discovery by the Seller, the Servicer or the Purchaser of a breach of any of the foregoing representations and warranties which materially and adversely affects the value of the Revolving Credit Loans or the interest of the Purchaser in any Revolving Credit Loan, the party discovering such breach shall give prompt written notice to the others. With respect to the representations and warranties which are made to the best of the Seller’s knowledge, if it is discovered by the Seller, the Servicer or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Revolving Credit Loan or the interests of the Purchaser therein, notwithstanding such Seller’s lack of knowledge with respect to the substance of such representation or warranty, such inaccuracy shall be deemed a breach of the applicable representation or warranty. The Seller shall have a period of sixty (60) days from the earlier of its discovery or its receipt of notice of any such breach within which to correct or cure such breach. The Seller hereby covenants and agrees that if any such breach is not corrected or cured within such sixty (60) day period the Seller shall, at the Purchaser’s option either repurchase such Revolving Credit Loan at the Repurchase Price or substitute a Revolving Credit Loan for the defective Revolving Credit Loan as provided below. In the event that any such breach shall involve any representation or warranty set forth in Section 3.01, and such breach is not cured within such sixty (60) day period of the earlier of either discovery by or notice to the Seller of such breach, all Revolving Credit Loans shall, at the option of the Purchaser, be repurchased by the Seller at the Repurchase Price. Any such repurchase shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price.
If the Seller is required to repurchase any Revolving Credit Loan pursuant to this Section 3.03 as a result of a breach of any of the representations and warranties set forth in Section 3.02, the Seller may, with the Purchaser’s prior consent, within two (2) years from the Closing Date, remove such defective Revolving Credit Loan from the terms of this Agreement and substitute another Revolving Credit Loan for such defective Revolving Credit Loan, in lieu of repurchasing such defective Revolving Credit Loan. Any substitute Revolving Credit Loan shall (a) have a principal balance at the time of substitution not in excess of the principal balance of the defective Revolving Credit Loan (the amount of any difference, plus one month’s interest thereon at the Mortgage Interest Rate borne by the defective Revolving Credit Loan, being paid by the Seller and deemed to be a Principal Prepayment to be deposited by the Seller in the Custodial Account), (b) have a Mortgage Interest Rate not less than, and not more than one percentage point greater than, the Mortgage Interest Rate of the removed Revolving Credit Loan, (c) have a remaining term to stated maturity not later than, and not more than one year less than, the remaining term to stated maturity of the removed Revolving Credit Loan, (d) be, in the reasonable determination of the Purchaser, of the same type, quality and character (including location of the Mortgaged Property) as the removed Revolving Credit Loan as if the breach had not occurred, (e) with respect to any second lien Revolving Credit Loan, have each a Combined Loan-to-Value Ratio and an Equity Loan-to-Value Ratio at origination no greater than that of the defective Revolving Credit Loan, (f) with respect to any first lien Revolving Credit Loan, have each a Loan-to-Value Ratio at origination no greater than that of the defective Revolving Credit Loan and (g) be, in the reasonable determination of the Purchaser, in compliance with the representations and warranties contained in this Agreement and described in Section 3.02 as of the date of substitution.
The Seller shall amend the Revolving Credit Loan Schedule to reflect the withdrawal of the removed Revolving Credit Loan from this Agreement and the substitution of such substitute Revolving Credit Loan therefor. Upon such amendment, the Purchaser shall review the Mortgage File delivered to it relating to the substitute Revolving Credit Loan. The Minimum Monthly Payment on a substitute Revolving Credit Loan due on the Due Date in the month of substitution shall be the property of the Seller and the Monthly Payment on the defective Revolving Credit Loan for which the substitution is made due on such date shall be the property of the Purchaser.
It is understood and agreed that the obligation of the Seller set forth in this Section 3.03 to cure, repurchase or substitute for a defective Revolving Credit Loan, and to indemnify Purchaser pursuant to Section 8.01, constitutes the sole remedies of the Purchaser respecting a breach of the foregoing representations and warranties. If the Seller fails to repurchase or substitute for a defective Revolving Credit Loan in accordance with this Section 3.03, or fails to cure a defective Revolving Credit Loan to Purchaser’s reasonable satisfaction in accordance with this Section 3.03, or to indemnify Purchaser pursuant to Section 8.01, that failure shall, upon compliance by the Purchaser with the next to the last paragraph of this Section 3.03, be an Event of Default and the Purchaser shall be entitled to pursue all available remedies. No provision of this paragraph shall affect the rights of the Purchaser to terminate this Agreement for cause, as set forth in Sections 9.01 and 10.01.
Any cause of action against the Seller relating to or arising out of the breach of any representations and warranties made in Sections 3.01 and 3.02 shall accrue as to any Revolving Credit Loan upon (i) the earlier of discovery of such breach by the Seller or notice thereof by the Purchaser to the Seller and (ii) failure by the Seller to cure such breach or repurchase such Revolving Credit Loan as specified above.
In the event that any Revolving Credit Loan is held by a REMIC, notwithstanding any contrary provision of this Agreement, with respect to any Revolving Credit Loan that is not in default or as to which no default is imminent, Purchaser may, in connection with any repurchase or substitution of a defective Revolving Credit Loan pursuant to this Section 3.03, require that the Seller deliver, at the Seller’s expense, an Opinion of Counsel to the effect that such repurchase or substitution will not (i) result in the imposition of taxes on “prohibited transactions” of such REMIC (as defined in Section 860F of the Code) or otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail to qualify as a REMIC at any time.
Section 3.04. Repurchase of Revolving Credit Loans With Early Payment Defaults.
If (a) a Mortgagor is thirty (30) days or more delinquent with respect to any of the first two (2) Minimum Monthly Payments due on the related Revolving Credit Loan immediately following the Closing Date or (b) a Revolving Credit Loan is in bankruptcy or litigation within the first three (3) months immediately following the Closing Date, the Seller, at the Purchaser’s option, shall promptly repurchase such Revolving Credit Loan from the Purchaser in accordance with the procedures set forth in Section 3.03 hereof, however, any such repurchase shall be made at the applicable Repurchase Price.
Section 3.05. Purchase Price Protection.
With respect to any Revolving Credit Loan that prepays in full during the three (3) month period from and after the Closing Date, the Seller shall reimburse the Purchaser the amount (if any) by which the Purchase Price paid by the Purchaser to the Seller exceeded 100% of the outstanding scheduled principal balance of the Revolving Credit Loan as of the Cut-off Date, within thirty (30) days of such payoff. Upon any assignment of a Revolving Credit Loan and/or this Agreement, the Purchaser may at its option retain its rights under this Section 3.05 notwithstanding such assignment.
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE REVOLVING CREDIT LOANS
Section 4.01. The Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service and administer the Revolving Credit Loans in accordance with this Agreement, all applicable law and with Accepted Servicing Practices, and shall have full power and authority, acting alone, to do or cause to be done any and all things in connection with such servicing and administration which the Servicer may deem necessary or desirable and consistent with the terms of this Agreement, with Accepted Servicing Practices and applicable law. The Servicer shall service and administer the Revolving Credit Loans through the exercise of the same care that it customarily employs for its own account. Except as set forth in this Agreement, the Servicer shall service the Revolving Credit Loans in strict compliance with the servicing provisions of the Fannie Mae Guides (special servicing option), which include, but are not limited to, provisions regarding the liquidation of Revolving Credit Loans, the collection of Revolving Credit Loan payments, the payment of taxes, insurance and other charges, the maintenance of hazard insurance with a Qualified Insurer, the maintenance of mortgage impairment insurance, the maintenance of fidelity bond and errors and omissions insurance, inspections, the restoration of Mortgaged Property, insurance claims, the title, management of REO Property, permitted withdrawals with respect to REO Property, liquidation reports, and reports of foreclosures and abandonments of Mortgaged Property, the transfer of Mortgaged Property, the release of Mortgage Files, annual statements, and examination of records and facilities. In the event of any conflict, inconsistency or discrepancy between any of the servicing provisions of this Agreement and any of the servicing provisions of the Fannie Mae Guides, the provisions of this Agreement shall control and be binding upon the Purchaser and the Servicer.
Consistent with the terms of this Agreement, the Servicer may waive, modify or vary any term of any Revolving Credit Loan or consent to the postponement of any such term or in any manner grant indulgence to any Mortgagor if in the Servicer’s reasonable and prudent determination such waiver, modification, postponement or indulgence is not materially adverse to the Purchaser, provided, however, that unless the Servicer has obtained the prior written consent of the Purchaser, the Servicer shall not permit any modification with respect to any Revolving Credit Loan that would change the Mortgage Interest Rate, forgive the payment of principal or interest, reduce or increase the outstanding principal balance (except for actual payments of principal) or change the final maturity date on such Revolving Credit Loan. In the event of any such modification which has been agreed to in writing by the Purchaser and which permits the deferral of interest or principal payments on any Revolving Credit Loan, the Servicer shall, on the Business Day immediately following the Business Day on which any such principal or interest payment has been deferred, deposit in the Custodial Account from its own funds, in accordance with Section 4.04, the difference between (a) the Minimum Monthly Payment and (b) the amount paid by the Mortgagor. The Servicer shall be entitled to reimbursement for such advances to the same extent as for all other advances pursuant to Section 4.05. Without limiting the generality of the foregoing, the Servicer shall continue, and is hereby authorized and empowered, to prepare, execute and deliver, all instruments of satisfaction or cancellation, or of partial or full release, discharge and all other comparable instruments, with respect to the Revolving Credit Loans and with respect to the Mortgaged Properties. Notwithstanding anything herein to the contrary, the Servicer may not enter into a forbearance agreement or similar arrangement with respect to any Revolving Credit Loan that runs more than 180 days after the first delinquent Due Date.
Unless a different time period is stated in this Agreement, the Purchaser shall be deemed to have given consent in connection with a particular matter if the Purchaser does not affirmatively grant or deny consent within five (5) Business Days from the date the Purchaser receives a second written request for consent for such matter from the Servicer.
Section 4.02. Collection of Revolving Credit Loan Payments.
Continuously from the date hereof until the date each Revolving Credit Loan ceases to be serviced subject to this Agreement, the Servicer will proceed diligently to collect all payments due under each Revolving Credit Loan when the same shall become due and payable and shall, to the extent such procedures shall be consistent with this Agreement and Accepted Servicing Practices and applicable law, follow such collection procedures as it follows with respect to Revolving Credit Loans comparable to the Revolving Credit Loans and held for its own account. Further, the Servicer will take special care in ascertaining and estimating annual escrow payments, and all other charges that, as provided in the Mortgage, will become due and payable, so that the installments payable by the Mortgagors will be sufficient to pay such charges as and when they become due and payable.
Section 4.03. Realization Upon Defaulted Revolving Credit Loans.
The Servicer shall use its best efforts, consistent with the procedures that the Servicer would use in servicing loans for its own account, consistent with Accepted Servicing Practices, applicable law and the best interest of Purchaser, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Revolving Credit Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 4.01. Foreclosure or comparable proceedings shall be initiated within one hundred twenty (120) days of default for Mortgaged Properties for which no satisfactory arrangements can be made for collection of delinquent payments. The Servicer shall use its best efforts to realize upon defaulted Revolving Credit Loans in such manner as will maximize the receipt of principal and interest by the Purchaser, taking into account, among other things, the timing of foreclosure proceedings. The foregoing is subject to the provisions that, in any case in which the Mortgaged Property shall have suffered damage, the Servicer shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (i) that such restoration will increase the proceeds of liquidation of the related Revolving Credit Loan to the Purchaser after reimbursement to itself for such expenses, and (ii) that such expenses will be recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Section 4.05. The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings and prior to the acceptance or rejection of any offer of reinstatement. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser’s expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property.
In the event that a Revolving Credit Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer within three (3) years after becoming an REO Property, unless the Servicer provides to the trustee under such REMIC an opinion of counsel to the effect that the holding of such REO Property subsequent to three years after its becoming REO Property, will not result in the imposition of taxes on “prohibited transactions” as defined in Section 860F of the Code, or cause the transaction to fail to qualify as a REMIC at any time that certificates are outstanding. The Servicer shall manage, conserve, protect and operate each such REO Property for the certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such property to fail to qualify as “foreclosure property” within the meaning of Section 860F(a)(2)(E) of the Code, or any “net income from foreclosure property” which is subject to taxation under the REMIC provisions of the Code. Pursuant to its efforts to sell such property, the Servicer shall either itself or through an agent selected by the Servicer, protect and conserve such property in the same manner and to such an extent as is customary in the locality where such property is located. Additionally, the Servicer shall perform the tax withholding and reporting related to Sections 1445 and 6050J of the Code.
Section 4.04. Establishment of Custodial Accounts; Deposits in Custodial Accounts.
The Seller shall segregate and hold all funds collected and received pursuant to each Revolving Credit Loan separate and apart from any of its own funds and general assets and shall establish and maintain one or more Custodial Accounts. Each Custodial Account shall be an Eligible Account. Funds deposited in a Custodial Account may be drawn on in accordance with Section 4.05. The creation of any Custodial Account shall be evidenced by a letter agreement in the form shown in Exhibit B hereto. The original of such letter agreement shall be furnished to the Purchaser on the Closing Date, and upon the request of any subsequent purchaser.
The Seller shall deposit in the Custodial Account on a daily basis the following payments and collections received or made by it subsequent to the Cut-off Date, or received by it prior to the Cut-off Date but allocable to a period subsequent thereto, other than in respect of principal and interest on the Revolving Credit Loans due on or before the Cut-off Date:
(i) all payments on account of principal, including Principal Prepayments, on the Revolving Credit Loans;
(ii) all payments on account of interest on the Revolving Credit Loans adjusted to the Mortgage Interest Rate;
(iii) all Liquidation Proceeds;
(iv) any amounts required to be deposited by the Servicer in connection with any REO Property pursuant to Section 4.13;
(v) all Insurance Proceeds including amounts required to be deposited pursuant to Sections 4.08, 4.10 and 4.11, other than proceeds to be held in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or released to the Mortgagor in accordance with Accepted Servicing Practices, the loan documents or applicable law;
(vi) all Condemnation Proceeds affecting any Mortgaged Property which are not released to the Mortgagor in accordance with the Seller’s normal servicing procedures, the loan documents or applicable law;
(vii) all proceeds of any Revolving Credit Loan repurchased in accordance with Sections 3.03, 3.04 and 3.05;
(viii) any amounts required to be deposited by the Servicer pursuant to Section 4.11 in connection with the deductible clause in any blanket hazard insurance policy, such deposit shall be made from the Servicer’s own funds, without reimbursement therefor; and
(ix) any amounts required to be deposited in the Custodial Account pursuant to Section 4.01 or Section 6.02.
The foregoing requirements for deposit in the Custodial Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of late payment charges, Cancellation Fees, annual credit line fees, subordination fees and assumption fees to the extent permitted by Section 6.01, need not be deposited by the Seller in the Custodial Account. Any interest paid on funds deposited in the Custodial Account by the depository institution shall accrue to the benefit of the Servicer and the Servicer shall be entitled to retain and withdraw such interest from the Custodial Account pursuant to Section 4.05(iv).
Section 4.05. Permitted Withdrawals From the Custodial Account.
The Servicer may, from time to time, withdraw from the Custodial Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in the manner provided for in Section 5.01;
(ii) [Reserved];
(iii) to reimburse itself for unreimbursed Servicing Advances and any unpaid Servicing Fees, the Servicer’s right to reimburse itself pursuant to this subclause (iii) with respect to any Revolving Credit Loan being limited to related proceeds from Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds in accordance with the relevant provisions of the Fannie Mae Guides or as otherwise set forth in this Agreement, it being understood that for those Revolving Credit Loans in foreclosure, the Purchaser shall reimburse the Servicer for Servicing Advances and Servicing Fees through the completion of foreclosure and disposition of the REO Property; such reimbursement shall be monthly after completion of foreclosure or deed-in-lieu proceedings;
(iv) to pay to itself as part of its servicing compensation: (a) any interest earned on funds in the Custodial Account, and (b) the Servicing Fee from that portion of any payment or recovery as to interest with respect to a particular Revolving Credit Loan;
(v) subject to the terms and conditions of Section 5.01 below, to pay to the Seller the amount of any Additional Balances transferred to the Purchaser;
(vi) to transfer funds to another Eligible Account in accordance with Section 4.09 hereof;
(vii) to remove funds inadvertently placed in the Custodial Account by the Servicer; and
(viii) to clear and terminate the Custodial Account upon the termination of this Agreement.
Section 4.06. Establishment of Escrow Accounts; Deposits in Accounts.
If an Escrow Account is maintained with respect to any Revolving Credit Loan, the Servicer shall segregate and hold all funds collected and received pursuant to each Revolving Credit Loan which constitute Escrow Payments separate and apart from any of its own funds and general assets and shall establish and maintain one or more Escrow Accounts. Each Escrow Account shall be an Eligible Account. Funds deposited in the Escrow Account may be drawn on by the Servicer in accordance with Section 4.07. The creation of any Escrow Account shall be evidenced by a letter agreement in the form shown in Exhibit C. The original of such letter agreement shall be furnished to the Purchaser on the Closing Date, and upon request to any subsequent purchaser.
The Servicer shall deposit in the Escrow Account or Accounts on a daily basis, and retain therein:
(i) all Escrow Payments collected on account of the Revolving Credit Loans, for the purpose of effecting timely payment of any such items as required under the terms of this Agreement or under the Revolving Credit Loan Documents;
(ii) all Insurance Proceeds which are to be applied to the restoration or repair of any Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose Escrow Payments are insufficient to cover escrow disbursements.
The Servicer shall make withdrawals from the Escrow Account only to effect such payments as are required under this Agreement, and for such other purposes as shall be as set forth or in accordance with Section 4.07. The Servicer shall be entitled to retain any interest paid on funds deposited in an Escrow Account by the depository institution other than interest on escrowed funds required by law to be paid to the Mortgagor and, to the extent required by law, the Servicer shall pay interest on escrowed funds to the Mortgagor notwithstanding that such Escrow Account is non-interest bearing or that interest paid thereon is insufficient for such purposes.
Section 4.07. Permitted Withdrawals From the Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments, water rates, fire and hazard insurance premiums, condominium assessments and comparable items;
(ii) to reimburse the Servicer for any Servicing Advance made by the Servicer with respect to a related Revolving Credit Loan but only from amounts received on the related Revolving Credit Loan which represent late payments or collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be determined to be overages;
(iv) for transfer to the Custodial Account in accordance with the terms of this Agreement;
(v) for application to restoration or repair of the Mortgaged Property;
(vi) to pay to the Servicer, or to the Mortgagor to the extent required by law, any interest paid on the funds deposited in the Escrow Account;
(vii) to clear and terminate the Escrow Account on the termination of this Agreement;
(viii) to pay to the Mortgagors or other parties Insurance Proceeds deposited in accordance with Section 4.06; and
(ix) to remove funds inadvertently placed in the Escrow Account by the Servicer.
Section 4.08. Payment of Taxes, Insurance and Charges; Collections Thereunder.
With respect to each Revolving Credit Loan, the Servicer shall maintain accurate records reflecting the status of ground rents, taxes, assessments, water rates and other charges which are or may become a lien upon the Mortgaged Property and fire and hazard insurance coverage and shall obtain, from time to time, all bills for the payment of such charges, including renewal premiums and shall effect payment thereof prior to the applicable penalty or termination date and at a time appropriate for securing maximum discounts allowable, employing for such purpose deposits of the Mortgagor in the Escrow Account which shall have been estimated and accumulated by the Servicer in amounts sufficient for such purposes, as allowed under the terms of the Mortgage or applicable law. To the extent that the Mortgage does not provide for Escrow Payments, the Servicer shall determine that any such payments are made by the Mortgagor at the time they first become due. The Servicer assumes full responsibility for the timely payment of all such bills and shall effect timely payments of all such bills irrespective of the Mortgagor’s faithful performance in the payment of same or the making of the Escrow Payments and shall make advances from its own funds to effect such payments.
Section 4.09. Transfer of Accounts.
The Servicer may transfer a Custodial Account or an Escrow Account to a different Eligible Account from time to time. Such transfer shall be made only upon obtaining the prior written consent of the Purchaser, which consent will not be unreasonably withheld.
Section 4.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Revolving Credit Loan fire and hazard insurance with extended coverage as is acceptable to Fannie Mae and Freddie Mac and customary in the area where the Mortgaged Property is located in an amount which is equal to the lesser of (i) the maximum insurable value of the improvements securing such Revolving Credit Loan and (ii) the greater of (a) the combined principal balance of the outstanding Revolving Credit Loan and any First Lien, and (b) an amount such that the proceeds thereof shall be sufficient to prevent the Mortgagor and/or the mortgagee from becoming a co-insurer. If required by the Flood Disaster Protection Act of 1973, as amended, each Revolving Credit Loan shall be covered by a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration in effect with an insurance carrier acceptable to Fannie Mae and/or Freddie Mac, in an amount representing coverage not less than the least of (i) the outstanding principal balance of the Revolving Credit Loan, (ii) the maximum insurable value of the improvements securing such Revolving Credit Loan and (iii) the maximum amount of insurance which is available under the Flood Disaster Protection Act of 1973, as amended. If at any time during the term of the Revolving Credit Loan, the Servicer determines in accordance with applicable law and pursuant to the Fannie Mae Guides that a Mortgaged Property is located in a special flood hazard area and is not covered by flood insurance or is covered in an amount less than the amount required by the Flood Disaster Protection Act of 1973, as amended, the Servicer shall notify the related Mortgagor that the Mortgagor must obtain such flood insurance coverage, and if said Mortgagor fails to obtain the required flood insurance coverage within forty-five (45) days after such notification, the Servicer shall immediately force place the required flood insurance on the Mortgagor’s behalf. The Servicer shall also maintain on each REO Property, fire and hazard insurance with extended coverage in an amount which is at least equal to the maximum insurable value of the improvements which are a part of such property, and, to the extent required and available under the Flood Disaster Protection Act of 1973, as amended, flood insurance in an amount as provided above. Any amounts collected by the Servicer under any such policies other than amounts to be deposited in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or REO Property, or released to the Mortgagor in accordance with Accepted Servicing Practices, shall be deposited in the Custodial Account, subject to withdrawal pursuant to Section 4.05. It is understood and agreed that no other additional insurance need be required by the Servicer or maintained on property acquired in respect of the Revolving Credit Loan, other than pursuant to this Agreement, the Fannie Mae Guides or such applicable state or federal laws and regulations as shall at any time be in force and as shall require such additional insurance. All such policies shall be endorsed with standard mortgagee clauses with loss payable to the Servicer and its successors and/or assigns and shall provide for at least thirty days prior written notice of any cancellation, reduction in the amount or material change in coverage to the Servicer. The Servicer shall not interfere with the Mortgagor’s freedom of choice in selecting either his insurance carrier or agent, provided, however, that the Servicer shall not accept any such insurance policies from insurance companies unless such companies are Qualified Insurers.
Section 4.11. Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a blanket policy issued by an issuer acceptable to Fannie Mae and/or Freddie Mac insuring against hazard losses on all of the Revolving Credit Loans, then, to the extent such policy provides coverage in an amount equal to the amount required pursuant to Section 4.10 and otherwise complies with all other requirements of Section 4.10, it shall conclusively be deemed to have satisfied its obligations as set forth in Section 4.10, it being understood and agreed that such policy may contain a deductible clause, in which case the Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy complying with Section 4.10, and there shall have been a loss which would have been covered by such policy, deposit in the Custodial Account the amount not otherwise payable under the blanket policy because of such deductible clause. In connection with its activities as servicer of the Revolving Credit Loans, the Servicer agrees to prepare and present, on behalf of the Purchaser, claims under any such blanket policy in a timely fashion in accordance with the terms of such policy. Upon request of the Purchaser, the Servicer shall cause to be delivered to the Purchaser a certified true copy of such policy and shall use its best efforts to obtain a statement from the insurer thereunder that such policy shall in no event be terminated or materially modified without thirty (30) days’ prior written notice to the Purchaser.
Section 4.12.
Maintenance of Fidelity Bond and Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity bond and an errors and omissions insurance policy, with broad coverage with responsible companies on all officers, employees or other persons acting in any capacity with regard to the Revolving Credit Loans to handle funds, money, documents and papers relating to the Revolving Credit Loans. The Fidelity Bond shall be in the form of a mortgage banker’s blanket bond and shall protect and insure the Servicer against losses, including forgery, theft, embezzlement and fraud of such persons. The errors and omissions insurance shall protect and insure the Servicer against losses arising out of errors and omissions and negligent acts of such persons. Such errors and omissions insurance shall also protect and insure the Servicer against losses in connection with the failure to maintain any insurance policies required pursuant to this Agreement and the release or satisfaction of a Revolving Credit Loan without having obtained payment in full of the indebtedness secured thereby. No provision of this Section 4.12 requiring the Fidelity Bond or errors and omissions insurance shall diminish or relieve the Servicer from its duties and obligations as set forth in this Agreement. The minimum coverage under any such bond and insurance policy shall be at least equal to the corresponding amounts required by Fannie Mae in the Fannie Mae Guides or by Freddie Mac in the Freddie Mac Guides. The Servicer shall deliver to the Purchaser a certificate from the surety and the insurer as to the existence of the Fidelity Bond and errors and omissions insurance policy and shall obtain a statement from the surety and the insurer that such Fidelity Bond or insurance policy shall in no event be terminated or materially modified without thirty (30) days’ prior written notice to the Purchaser. The Seller shall notify the Purchaser within five (5) business days of receipt of notice that such Fidelity Bond or insurance policy will be, or has been, materially modified or terminated. The Purchaser (or any party having the status of Purchaser hereunder) and any subsidiary thereof and their successors or assigns as their interests may appear must be named as loss payees on the Fidelity Bond and as additional insured on the errors and omissions policy. Upon request by the Purchaser, the Servicer shall provide the Purchaser with an insurance certificate certifying coverage under this Section 4.12, and will provide an update to such certificate upon request, or upon renewal or material modification of coverage.
Section 4.13. Title, Management and Disposition of REO Property.
In the event that title to the Mortgaged Property is acquired in foreclosure, by deed in lieu of foreclosure or other method resulting in full or partial satisfaction of the related Mortgage, the deed or certificate of sale shall be taken in the name of the Purchaser or its designee, or in the event the Purchaser or its designee is not authorized or permitted to hold title to real property in the state where the REO Property is located, or would be adversely affected under the “doing business” or tax laws of such state by so holding title, the deed or certificate of sale shall be taken in the name of such Person or Persons as shall be consistent with an opinion of counsel obtained by the Servicer from an attorney duly licensed to practice law in the state where the REO Property is located. Any Person or Persons holding such title other than the Purchaser shall acknowledge in writing that such title is being held as nominee for the benefit of the Purchaser.
The Servicer shall notify the Purchaser in accordance with the Fannie Mae Guides of each acquisition of REO Property upon such acquisition, together with a copy of the drive-by appraisal or brokers price opinion of the Mortgaged Property obtained in connection with such acquisition, and thereafter assume the responsibility for marketing such REO Property in accordance with Accepted Servicing Practices. Thereafter, the Servicer shall continue to provide certain administrative services to the Purchaser relating to such REO Property as set forth in this Section 4.13.
The Servicer shall, either itself or through an agent selected by the Servicer, and in accordance with the Fannie Mae Guides manage, conserve, protect and operate each REO Property in the same manner that it manages, conserves, protects and operates other foreclosed property for its own account, and in the same manner that similar property in the same locality as the REO Property is managed. The Servicer shall cause each REO Property to be inspected promptly upon the acquisition of title thereto and shall cause each REO Property to be inspected at least monthly thereafter or more frequently as required by the circumstances. The Servicer shall make or cause to be made a written report of each such inspection. Such reports shall be retained in the Servicing File and copies thereof shall be forwarded by the Servicer to the Purchaser.
The Servicer shall use its best efforts to dispose of the REO Property as soon as possible and shall sell such REO Property in any event within two (2) years after title has been taken to such REO Property, unless the Servicer determines, and gives an appropriate notice to the Purchaser to such effect, that a longer period is necessary for the orderly liquidation of such REO Property. If a longer period than two (2) years is permitted under the foregoing sentence and is necessary to sell any REO Property, the Servicer shall report monthly to the Purchaser as to the progress being made in selling such REO Property. No REO Property shall be marketed for less than the appraised value, without the prior consent of the Purchaser. No REO Property shall be sold for less than ninety five percent (95%) of its appraised value, without the prior consent of the Purchaser. If as of the date title to any REO Property was acquired by the Servicer there were outstanding unreimbursed Servicing Advances with respect to the REO Property, the Servicer shall be entitled to immediate reimbursement from the Purchaser for any related unreimbursed Servicing Advances. All requests for reimbursement of Servicing Advances shall be in accordance with the Fannie Mae Guides. The disposition of REO Property shall be carried out by the Servicer at such price, and upon such terms and conditions, as the Servicer deems to be in the best interests of the Purchaser. The Servicer shall provide monthly reports to Purchaser in reference to the status of the marketing of the REO Properties.
Notwithstanding anything to the contrary contained herein, the Purchaser may, at the Purchaser’s sole option, terminate the Servicer as servicer of any such REO Property without payment of any termination fee with respect thereto, provided that the Servicer shall on the date said termination takes effect be reimbursed by withdrawal from the Custodial Account for any unreimbursed Servicing Advances in each case relating to the Revolving Credit Loan underlying such REO Property notwithstanding anything to the contrary set forth in Section 4.05. In the event of any such termination, the provisions of Section 11.02 hereof shall apply to said termination and the transfer of servicing responsibilities with respect to such REO Property to the Purchaser or its designee.
Section 4.14. Notification of Maturity Date.
Section 4.15. Subordination of Lien Priority.
(i) such Mortgage succeeded to a first lien position after the related Revolving Credit Loan was conveyed to the Purchaser and, immediately following the placement of such senior lien, such Mortgage is in a second lien position and both (I) the outstanding principal amount of the mortgage loan secured by such senior lien is no greater than the outstanding principal amount of the first mortgage loan secured by the Mortgaged Property as of the date the related Revolving Credit Loan was conveyed to the Purchaser and (II) the updated CLTV of such Revolving Credit Loan is not greater than the CLTV of such Revolving Credit Loan as of the date such Revolving Credit Loan was conveyed to the Purchaser; or
(i) the original term of the new senior lien is greater than the original term of the prior senior lien;
(ii) the new senior lien is a balloon loan;
(iii) the new senior lien is a negatively amortizing loan;
(iv) the new senior lien has a higher coupon than the prior senior lien;
(v) the new senior lien is a cashout refinancing;
(vi) the monthly payment on the new senior lien is greater than the monthly payment of the prior senior lien; or
(vii) the debt to income ratio of the new senior lien is greater than the debt to income ratio of the prior senior lien.
ARTICLE V
PAYMENTS TO THE PURCHASER
Section 5.01. Distributions.
On each Remittance Date, the Servicer shall distribute, by wire transfer to the related account specified on Exhibit J hereto, to the Purchaser all amounts required to be on deposit in the Custodial Account as of the close of business on the preceding Business Day, net of charges against or withdrawals from the Custodial Account pursuant to Section 4.05;
On each Remittance Date, the Servicer shall furnish to the Purchaser, a daily remittance report in the form of Exhibit H hereto. On each Remittance Date, if the daily remittance report indicates that (i) (x) the aggregate amount of Additional Balances to be transferred to the Purchaser on such date exceeds (y) the amount required to be on deposit in the Custodial Account as of the close of business on the preceding Business Day (which amount, for the avoidance of doubt, is the amount required to be remitted to the Purchaser on such Remittance Date pursuant to the immediately preceding paragraph), the Servicer shall provide a notice to the Seller indicating the amount of such excess, and (ii) the amount described in clause (y) above exceeds the amount described in clause (x) above, the Servicer shall (1) in accordance with the terms and conditions of Section 4.05(v) above, be entitled to withdraw from the Custodial Account an amount equal to the amount described in clause (x) above and (2) remit to the Purchaser the related daily remittance. If the notice required to be delivered to the purchaser as described in clause (i) above is received by the Purchaser by 10:00 a.m. Eastern Time on a given Business Day, the Purchaser shall, by 5:00 p.m. Eastern Time on such Business Day, remit to the Seller by wire transfer to the related account specified on Exhibit J hereto the amount of any such excess. If the notice required to be delivered to the Purchaser as described in clause (i) above is received by the Purchaser after 10:00 a.m. Eastern Time on a given Business Day, the Purchaser shall remit the required amount to the designated account no later than 5:00 p.m. on the following Business Day.
With respect to any remittance received by the Purchaser after the Business Day on which such payment was due, the Servicer shall pay to the Purchaser interest on any such late payment at an annual rate equal to the Prime Rate, adjusted as of the date of each change, plus three percentage points, but in no event greater than the maximum amount permitted by applicable law. Such interest shall be deposited in the Custodial Account by the Servicer on the date such late payment is made and shall cover the period commencing with the day following the Business Day on which such payment was due and ending with the Business Day on which such payment is made, both inclusive. Such interest shall be remitted along with the distribution payable on the next succeeding Remittance Date. The payment by the Servicer of any such interest shall not be deemed an extension of time for payment or a waiver of any Event of Default by the Servicer.
Section 5.02. Statements to the Purchaser.
On each Remittance Date, the Servicer shall furnish to the Purchaser, a daily remittance report in the form of Exhibit H hereto, which report shall include, without limitation, detailed activity of the following items for the preceding Business Day:
(i)	Additional Balances created on such day;
(ii)	All principal and interest received by the Servicer and other payments in respect of the Revolving Credit Loans received by the Servicer and deposited to the Custodial Account pursuant to Section 4.04 on such day;
(iii)
Any amounts to be withdrawn from the Custodial Account pursuant to Section 4.05(v) above;
(iv)	Any amounts to be remitted to the Seller by the Purchaser pursuant to Section 5.01 above; and
(v)	Any amounts to be remitted to the Purchaser by the Servicer pursuant to Section 5.01 above.
The Servicer shall furnish to the Purchaser an individual loan accounting report, as of the last Business Day of each month, in the Servicer’s assigned loan number order to document Revolving Credit Loan payment activity on an individual Revolving Credit Loan basis. With respect to each month, the corresponding individual loan accounting report shall be received by the Purchaser no later than the fifth (5th) Business Day of the following month on a disk or tape or other computer-readable format in such format as may be mutually agreed upon by both the Purchaser and the Servicer and in hard copy, which report shall contain the following:
(i) with respect to each Minimum Monthly Payment, the amount of such remittance allocable to principal (including a separate breakdown of any Principal Prepayment, including the date of such prepayment, and any Cancellation Fees or premiums, along with a detailed report of interest on principal prepayment amounts remitted in accordance with Section 4.04);
(ii) with respect to each Minimum Monthly Payment, the amount of such remittance allocable to interest;
(iii) the amount of servicing compensation received by the Servicer during the prior distribution period;
(iv) the aggregate Principal Balance of the Revolving Credit Loans;
(v) the aggregate amount of Additional Balances drawn down during the Billing Cycle;
(vi) the aggregate of any expenses reimbursed to the Servicer during the prior distribution period pursuant to Section 4.05; and
(vii) the number and aggregate outstanding principal balances of Revolving Credit Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days, and (3) 90 days or more; (b) as to which foreclosure has commenced; and (c) as to which REO Property has been acquired.
The Servicer shall also provide a monthly servicing report, sorted in the Purchaser’s assigned loan number order, in the form of Exhibit E hereto, with each such report.
The Servicer shall prepare and file any and all information statements or other filings required to be delivered to any governmental taxing authority or to the Purchaser pursuant to any applicable law with respect to the Revolving Credit Loans and the transactions contemplated hereby. In addition, the Servicer shall provide the Purchaser with such information concerning the Revolving Credit Loans as is necessary for the Purchaser to prepare its federal income tax return as the Purchaser may reasonably request from time to time.
In addition, not more than sixty (60) days after the end of each calendar year, the Servicer shall furnish to each Person who was a Purchaser at any time during such calendar year an annual statement in accordance with the requirements of applicable federal income tax law as to the aggregate of remittances for the applicable portion of such year.
Section 5.03. Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof by the Purchaser pursuant to a deed in lieu of foreclosure, the Servicer shall submit to the Purchaser a liquidation report with respect to such Mortgaged Property. The Servicer shall also provide reports on the status of REO Property containing such information as the Purchaser may reasonably require.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01. Assumption Agreements.
The Servicer shall, to the extent it has knowledge of any conveyance or prospective conveyance by any Mortgagor of the Mortgaged Property (whether by absolute conveyance or by contract of sale, and whether or not the Mortgagor remains or is to remain liable under the Mortgage Note and/or the Mortgage), exercise its rights to accelerate the maturity of such Revolving Credit Loan under any “due-on-sale” clause to the extent permitted by law; provided, however, that the Servicer shall not exercise any such rights if prohibited by law. If the Servicer reasonably believes it is unable under applicable law to enforce such “due-on-sale” clause, the Servicer, with the approval of the Purchaser (such approval not to be unreasonably withheld), will enter into an assumption agreement with the person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant to which such person becomes liable under the Mortgage Note and, to the extent permitted by applicable state law, the Mortgagor remains liable thereon. If the Servicer is prohibited under applicable law from (a) entering into an assumption agreement with the Person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed or (b) requiring the original Mortgagor to remain liable under the Mortgage Note, the Servicer, with the prior consent of the Purchaser is authorized to enter into a substitution of liability agreement with the person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed pursuant to which the original Mortgagor is released from liability and such Person is substituted as mortgagor and becomes liable under the related Mortgage Note. Any such substitution of liability agreement shall be in lieu of an assumption agreement. The Purchaser shall be deemed to have consented to any assumption for which the Purchaser was given notification and requested to consent, but for which neither a consent nor an objection was given by the Purchaser within two Business Days of such notification.
In connection with any such assumption or substitution of liability, the Servicer shall follow the underwriting practices and procedures of the Fannie Mae Guides. With respect to an assumption or substitution of liability, the Mortgage Interest Rate borne by the related Mortgage Note and the amount of the Minimum Monthly Payment may not be changed. If the credit of the proposed transferee does not meet such underwriting criteria, the Servicer diligently shall, to the extent permitted by the Mortgage or the Mortgage Note and by applicable law, accelerate the maturity of the Revolving Credit Loan. The Servicer shall notify the Purchaser that any such substitution of liability or assumption agreement has been completed by forwarding to the Purchaser the original of any such substitution of liability or assumption agreement, which document shall be added to the related Mortgage File and shall, for all purposes, be considered a part of such Mortgage File to the same extent as all other documents and instruments constituting a part thereof. All fees collected by the Servicer for entering into an assumption or substitution of liability agreement shall belong to the Servicer.
Notwithstanding the foregoing paragraphs of this Section or any other provision of this Agreement, the Servicer shall not be deemed to be in default, breach or any other violation of its obligations hereunder by reason of any assumption of a Revolving Credit Loan by operation of law or any assumption which the Servicer may be restricted by law from preventing, for any reason whatsoever. For purposes of this Section 6.01, the term “assumption” is deemed to also include a sale of the Mortgaged Property subject to the Mortgage that is not accompanied by an assumption or substitution of liability agreement.
Section 6.02. Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Revolving Credit Loan, or the receipt by the Servicer of a notification that payment in full will be escrowed in a manner customary for such purposes, the Servicer will immediately notify the Purchaser by a certification, which certification shall include a statement to the effect that all amounts received or to be received in connection with such payment which are required to be deposited in the Custodial Account pursuant to Section 4.04 have been or will be so deposited, of a Servicing Officer and shall request delivery to it of the portion of the Mortgage File held by the Purchaser. The Purchaser shall no later than five (5) Business Days after receipt of such certification and request, release or cause to be released to the Servicer, the related Revolving Credit Loan Documents and, upon its receipt of such documents, the Servicer shall promptly prepare and deliver to the Purchaser the requisite satisfaction or release. No later than three (3) Business Days following its receipt of such satisfaction or release, the Purchaser shall deliver, or cause to be delivered, to the Servicer the release or satisfaction properly executed by the owner of record of the applicable Mortgage or its duly appointed attorney in fact. No expense incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the Custodial Account.
In the event the Servicer satisfies or releases a Mortgage without having obtained payment in full of the indebtedness secured by the Mortgage or should it otherwise prejudice any right the Purchaser may have under the Revolving Credit Loan Documents, the Servicer, upon written demand, shall remit within two (2) Business Days to the Purchaser the then outstanding principal balance of the related Revolving Credit Loan by deposit thereof in the Custodial Account.
From time to time and as appropriate for the servicing or foreclosure of the Revolving Credit Loans the Purchaser shall, upon request of the Servicer and delivery to the Purchaser of a servicing receipt signed by a Servicing Officer, release the portion of the Mortgage File held by the Purchaser to the Servicer. Such servicing receipt shall obligate the Servicer to return such Revolving Credit Loan Documents to the Purchaser when the need therefor by the Servicer no longer exists, unless the Revolving Credit Loan has been liquidated and the Liquidation Proceeds relating to the Revolving Credit Loan have been deposited in the Custodial Account or the Mortgage File has been delivered to an attorney, or to a public trustee or other public official as required by law, for purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or non-judicially, and the Servicer has delivered to the Purchaser a certificate of a Servicing Officer certifying as to the name and address of the Person to which such Mortgage File was delivered and the purpose or purposes of such delivery. Upon receipt of a certificate of a Servicing Officer stating that such Revolving Credit Loan was liquidated, the servicing receipt shall be released by the Purchaser to the Servicer. The Servicer shall indemnify the Purchaser, and its designee, from and against any and all losses, claims, damages, penalties, fines, forfeitures, costs and expenses (including court costs and reasonable attorney’s fees) resulting from or related to the loss, damage or misplacement of any documentation delivered to the Servicer pursuant to this paragraph.
Section 6.03. Servicing Compensation.
As compensation for its services hereunder, the Servicer shall be entitled to the amounts provided for as the Servicer’s Servicing Fee. Additional servicing compensation in the form of Cancellation Fees, annual credit line fees, subordination fees, assumption fees, as provided in Section 6.01, and late payment charges or otherwise shall be retained by the Servicer to the extent not required to be deposited in the Custodial Account. The Servicer shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder and shall not be entitled to reimbursement therefor except as specifically provided for.
Section 6.04. Annual Statement as to Compliance.
Section 6.05.
Annual Independent Certified Public Accountants’ Servicing Report.
Not later than the earlier of (a) March 1st of each calendar year (other than the calendar year during which the Closing Date occurs) or (b) in the case of Revolving Credit Loans that are part of a securitization, with respect to any calendar year during which the securitization depositor’s annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations of the Commission, 30 calendar days before the date on which the securitization depositor’s annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations of the Commission (or, in each case, if such day is not a Business Day, the immediately preceding Business Day), the Servicer at its expense shall cause a nationally or regionally recognized firm of independent public accountants (who may also render other services to the Servicer, the Purchaser or any affiliate thereof) that is a member of the American Institute of Certified Public Accountants to furnish a statement to the Purchaser to the effect that such firm has examined certain documents and records relating to the servicing of mortgage loans that the Servicer is servicing, which may include the Revolving Credit Loans or similar mortgage loans, and that, on the basis of such examination, conducted substantially in compliance with the Uniform Single Attestation Program for Mortgage Bankers or the Audit Guide for HUD Approved Title II Approved Mortgagees and Loan Correspondent Programs, nothing has come to their attention which would indicate that such servicing has not been conducted in compliance with Accepted Servicing Practices, except for (a) such exceptions as such firm shall believe to be immaterial, and (b) such other exceptions as shall be set forth in such statement. In addition the Servicer shall disclose to such firm all significant deficiencies relating to the Servicer’s compliance with the minimum servicing standards set forth in this Agreement. Copies of such statement shall be provided by the Servicer to the Purchaser. In addition, on an annual basis, the Servicer shall provide the Purchaser with copies of its audited financial statements upon execution by the Purchaser of an agreement to keep confidential the contents of such financial statements.
Section 6.06. Purchaser’s Right to Examine Servicer Records.
The Purchaser shall have the right to examine and audit upon reasonable notice to the Servicer, during business hours or at such other times as might be reasonable under applicable circumstances, any and all of the books, records, documentation or other information of the Servicer, or held by another for the Servicer or on its behalf or otherwise, which relates to the performance or observance by the Servicer of the terms, covenants or conditions of this Agreement.
The Servicer shall provide to the Purchaser and any supervisory agents or examiners representing a state or federal governmental agency having jurisdiction over the Purchaser, including but not limited to OTS, FDIC and other similar entities, access to any documentation regarding the Revolving Credit Loans in the possession of the Servicer which may be required by any applicable regulations. Such access shall be afforded without charge, upon reasonable request, during normal business hours and at the offices of the Servicer, and in accordance with the federal government, FDIC, OTS, or any other similar regulations.
Section 6.07. Servicer Shall Provide Information as Reasonably Required.
The Seller shall furnish to the Purchaser during the term of this Agreement, at the Servicer’s expense, such periodic, special or other reports, information or documentation, whether or not provided for herein, as shall be necessary, reasonable or appropriate in respect to the Purchaser, or otherwise in respect to the Revolving Credit Loans and the performance of the Servicer under this Agreement, including any reports, information or documentation reasonably required to comply with any regulations regarding any supervisory agents or examiners of the Purchaser all such reports or information to be as provided by and in accordance with such applicable instructions and directions as the Purchaser may reasonably request in relation to this Agreement or the performance of the Servicer under this Agreement. The Servicer agrees to execute and deliver all such instruments and take all such action as the Purchaser, from time to time, may reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement.
In connection with marketing the Revolving Credit Loans, the Purchaser may make available to a prospective purchaser audited financial statements of the Seller and the Servicer for the most recently completed two (2) fiscal years for which such statements are available, as well as a consolidated statement of condition at the end of the last two (2) fiscal years covered by any consolidated statement of operations. If it has not already done so, the Seller and the Servicer shall furnish promptly to the Purchaser or a prospective purchaser copies of the statements specified above; provided, however, that prior to furnishing such statements or information to any prospective purchaser, the Seller and the Servicer may require such prospective purchaser to execute a confidentiality agreement in a form satisfactory to the Seller or Servicer, as applicable.
The Servicer shall make reasonably available to the Purchaser or any prospective purchaser a knowledgeable financial or accounting officer for the purpose of answering questions and to permit any prospective purchaser to inspect the Servicer’s servicing facilities for the purpose of satisfying such prospective purchaser that the Servicer has the ability to service the Revolving Credit Loans as provided in this Agreement.
The Servicer shall maintain with respect to each Revolving Credit Loan and shall make available for inspection by the Purchaser or its designee the related Servicing File during the time the Purchaser retains ownership of a Revolving Credit Loan and thereafter in accordance with applicable laws and regulations.
ARTICLE VII
[RESERVED]
ARTICLE VIII
THE SELLER AND THE SERVICER
Section 8.01. Indemnification; Third Party Claims.
The Servicer agrees to indemnify the Purchaser and hold it harmless against any and all claims, losses, damages, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that the Purchaser may sustain in any way related to the failure of the Servicer to observe and perform its duties, obligations, covenants, and agreements to service the Revolving Credit Loans in strict compliance with the terms of this Agreement. The Seller agrees to indemnify the Purchaser and hold it harmless against any and all claims, losses, damages, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that the Purchaser may sustain in any way related to the failure of the Seller to observe and perform its duties, obligations, and covenants in strict compliance with the terms of this Agreement or as a result of the breach of a representation or warranty set forth in Section 3.01 or 3.02 of this Agreement. An indemnifying party hereunder shall immediately notify the Purchaser if a claim is made by a third party with respect to this Agreement or a Revolving Credit Loan, assume (with the consent of the Purchaser) the defense of any such claim and pay all expenses in connection therewith, including counsel fees, and promptly pay, discharge and satisfy any judgment or decree which may be entered against it or the Purchaser in respect of such claim. An indemnifying party hereunder shall follow any written instructions received from the Purchaser in connection with such claim. The Purchaser shall promptly reimburse an indemnifying party hereunder for all amounts advanced by it pursuant to the two preceding sentences except when the claim relates to the failure of the Servicer to service and administer the Revolving Credit Loans in strict compliance with the terms of this Agreement, the failure of the Seller to perform its duties and obligations pursuant to this Agreement, the breach of representation or warranty set forth in Section 3.01 or 3.02, or the negligence, bad faith or willful misconduct of either the Seller or the Servicer. The provisions of this Section 8.01 shall survive termination of this Agreement and transfer of the servicing rights.
Section 8.02. Merger or Consolidation of the Seller or the Servicer.
Each of the Seller and the Servicer shall keep in full effect its existence, rights and franchises as a corporation under the laws of the state of its incorporation except as permitted herein, and shall obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement, or any of the Revolving Credit Loans and to perform its duties under this Agreement.
Any Person into which either the Seller or the Servicer may be merged or consolidated, or any corporation resulting from any merger, conversion or consolidation to which either the Seller or the Servicer shall be a party, or any Person succeeding to the business of either the Seller or the Servicer whether or not related to loan servicing, shall be the successor of the Seller or of the Servicer, as applicable, hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the successor or surviving Person shall be an institution (i) having a GAAP net worth of not less than $25,000,000, (ii) the deposits of which are insured by the FDIC, SAIF and/or BIF, or which is a HUD-approved mortgagee whose primary business is in origination and servicing of Revolving Credit Loans, and (iii) who is a Fannie Mae or Freddie Mac approved seller/servicer in good standing. Notwithstanding the foregoing, if the successor or surviving Person is an institution with a GAAP net worth of less than $25,000,000, then the Purchaser may, in its sole discretion, waive such minimum GAAP net worth requirement.
Section 8.03. Limitation on Liability of the Seller and Others.
None of the Seller, the Servicer nor any of the officers, employees or agents of the Seller or the Servicer shall be under any liability to the Purchaser for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment made in good faith; provided, however, that this provision shall not protect the Seller, the Servicer or any such person against any breach of warranties or representations made herein, or failure to perform its obligations in strict compliance with any standard of care set forth in this Agreement, or any liability which would otherwise be imposed by reason of negligence, bad faith or willful misconduct, or any breach of the terms and conditions of this Agreement. The Seller, the Servicer and any officer, employee or agent of the Seller and the Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by the Purchaser respecting any matters arising hereunder. The Servicer shall not be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its duties to service the Revolving Credit Loans in accordance with this Agreement and which in its reasonable opinion may involve it in any expenses or liability; provided, however, that the Servicer may, with the consent of the Purchaser, undertake any such action which it may deem necessary or desirable in respect to this Agreement and the rights and duties of the parties hereto. In such event, the reasonable legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities for which the Purchaser will be liable, and the Servicer shall be entitled to be reimbursed therefor from the Purchaser upon written demand.
Section 8.04. Servicer Not to Resign.
The Servicer shall not resign from the obligations and duties hereby imposed on it except by mutual consent of the Servicer and the Purchaser or upon the determination that its duties hereunder are no longer permissible under applicable law and such incapacity cannot be cured by the Servicer. Any such determination permitting the resignation of the Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to the Purchaser which Opinion of Counsel shall be in form and substance acceptable to the Purchaser. No such resignation shall become effective until a successor shall have assumed the Servicer’s responsibilities and obligations hereunder in the manner provided in Section 12.01.
Section 8.05. No Transfer of Servicing.
With respect to the retention of the Servicer to service the Revolving Credit Loans hereunder, the Servicer acknowledges that the Purchaser has acted in reliance upon the Servicer’s independent status, the adequacy of its servicing facilities, plan, personnel, records and procedures, its integrity, reputation and financial standing and the continuance thereof. Without in any way limiting the generality of this Section 8.05, the Servicer shall not either assign this Agreement or the servicing hereunder or delegate its rights or duties hereunder or any portion thereof, or sell or otherwise dispose of all or substantially all of its property or assets, without the prior written approval of the Purchaser, which consent shall be granted or withheld in the Purchaser’s sole discretion.
Without in any way limiting the generality of this Section 8.05, in the event that the Servicer either shall assign this Agreement or the servicing responsibilities hereunder or delegate its duties hereunder or any portion thereof without the prior written consent of the Purchaser, then the Purchaser shall have the right to terminate this Agreement as set forth in Section 10.01, without any payment of any penalty or damages and without any liability whatsoever to the Servicer (other than with respect to accrued but unpaid Servicing Advances and Servicing Fees remaining unpaid) or any third party.
ARTICLE IX
DEFAULT
Section 9.01. Events of Default.
In case one or more of the following Events of Default by the Servicer shall occur and be continuing, that is to say:
(i) any failure by the Servicer to remit to the Purchaser any payment required to be made under the terms of this Agreement which continues unremedied for a period of one (1) Business Day after the date upon which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Purchaser; or
(ii) failure on the part of the Servicer duly to observe or perform in any material respect any other of the covenants or agreements on the part of the Servicer set forth in this Agreement, or if any of the representations and warranties of the Servicer in Section 3.01 proves to be untrue in any material respect, which failure or breach continues unremedied for a period of thirty (30) days (except that such number of days shall be fifteen (15) in the case of a failure to pay any premium for any insurance policy required to be maintained under this Agreement) after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Purchaser; or
(iii) a decree or order of a court or agency or supervisory authority having jurisdiction for the appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of sixty (60) days; or
(iv) the Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Servicer or of or relating to all or substantially all of its property; or
(vi) the Servicer ceases to be approved by Fannie Mae or Freddie Mac as a Revolving Credit Loan seller and servicer for more than thirty (30) days; or
(vii) the Servicer attempts to assign its right to servicing compensation hereunder or the Servicer attempts, without the consent of the Purchaser, to sell or otherwise dispose of all or substantially all of its property or assets or to assign this Agreement or the servicing responsibilities hereunder or to delegate its duties hereunder or any portion thereof; or
(viii) the Servicer ceases to be (a) licensed to service residential Revolving Credit Loans in each jurisdiction in which a Mortgaged Property is located and such licensing is required, and (b) qualified to transact business in any jurisdiction where it is currently so qualified, but only to the extent such non-qualification materially and adversely affects the Servicer’s ability to perform its obligations hereunder; or
(ix) the Servicer fails to meet the eligibility criteria set forth in Section 8.02; or
(x) either (i) the servicer rankings or ratings for the Servicer are downgraded two or more levels below the level in effect on the date hereof by S&P or Moody’s or (ii) the Servicer shall fail to maintain at least an “Average” servicer rating from S&P or at least an “SQ3” servicer rating from Moody’s.
then, and in each and every such case, so long as an Event of Default shall not have been remedied, the Purchaser, by notice in writing to the Servicer may, in addition to whatever rights the Purchaser may have under Sections 3.03 and 8.01 and at law or equity or to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Servicer under this Agreement and in and to the Revolving Credit Loans and the proceeds thereof without compensating the Servicer for the same. On or after the receipt by the Servicer of such written notice of termination, all authority and power of the Servicer under this Agreement, whether with respect to the Revolving Credit Loans or otherwise, shall pass to and be vested in the successor appointed pursuant to Section 12.01. Upon written request from the Purchaser, the Servicer shall prepare, execute and deliver, any and all documents and other instruments, place in such successor’s possession all Servicing Files, and do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Revolving Credit Loans and related documents, or otherwise, at the Servicer’s sole expense. The Servicer agrees to cooperate with the Purchaser and such successor in effecting the termination of the Servicer’s responsibilities and rights hereunder, including, without limitation, the transfer to such successor for administration by it of all cash amounts which shall at the time be credited by the Servicer to the Custodial Account or Escrow Account or thereafter received with respect to the Revolving Credit Loans or any REO Property.
Section 9.02. Waiver of Defaults.
The Purchaser may waive only by written notice any default by the Servicer in the performance of its obligations hereunder and its consequences. Upon any such waiver of a past default, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived in writing.
ARTICLE X
TERMINATION
Section 10.01. Termination.
The respective obligations and responsibilities of the Servicer shall terminate upon: (i) the later of the final payment or other liquidation (or any advance with respect thereto) of the last Revolving Credit Loan or the disposition of all REO Property and the remittance of all funds due hereunder; (ii) by mutual consent of the Servicer and the Purchaser in writing; (iii) termination of the Servicer pursuant to Section 8.05, (iv) termination of the Servicer by the Purchaser if either of the two following conditions are satisfied: (a) the most recent six month rolling 60+ day average delinquency rate (including foreclosure and REOs) exceeds 4.00% of the outstanding aggregate Principal Balance or (b) cumulative losses through the given month exceed the percent of the aggregate Principal Balance as of the Cut-off Date as follows:
Month		Cumulative Loss % of the aggregate Principal Balance of the Revolving Credit Loans as of the Cut-off Date
12		80 bps
24		140 bps
36		205 bps
48		255 bps
60+		305 bps
or (iv) termination of the Servicer by the Purchaser with cause under the terms of this Agreement or in connection with the purchase of the servicing rights pursuant to Section 10.02 below.
If the Servicer is terminated pursuant to clause (iv) above, the Servicer may appoint a successor servicer so long as such successor servicer is approved in writing by the Purchaser and the Servicer shall be entitled to all proceeds resulting from such sale of servicing rights to such successor servicer.
Section 10.02. Purchase of Servicing.
If requested by the Purchaser in writing, the Servicer will sell the servicing rights to the Purchaser or its designee at a price mutually agreeable to the Purchaser and the Servicer based on the fair market value of the servicing rights. The Servicer agrees to fully cooperate with any transfer of servicing.
ARTICLE XI
RECONSTITUTION OF REVOLVING CREDIT LOANS
Section 11.01. Reconstitution of Revolving Credit Loans.
(a) The Seller and the Servicer acknowledge and the Purchaser agrees that with respect to some or all of the Revolving Credit Loans, the Purchaser may effect either:
(i) one or more sales of the Revolving Credit Loans as whole loan transfers (each, a “Whole Loan Transfer”); and/or
(ii) one or more sales of the Revolving Credit Loans as public or private pass-through transfers (each, a “Pass-Through Transfer”).
(b) With respect to each Whole Loan Transfer or Pass-Through Transfer, as the case may, the Seller and the Servicer agree:
(i) to cooperate fully with the Purchaser and any prospective purchaser with respect to all reasonable requests and due diligence procedures including participating in meetings with rating agencies, bond insurers and such other parties as the Purchaser shall designate and participating in meetings with prospective purchasers of the Revolving Credit Loans or interests therein and providing information contained in the Revolving Credit Loan Schedule including any diskette or other related data tapes provided as reasonably requested by such purchasers;
(ii) to execute all agreements required to be executed by the Seller and Servicer in connection with such Whole Loan Transfer or Pass-Through Transfer provided that any such agreements be consistent with the terms hereof and impose no greater duties, liabilities or obligations upon the Seller than those set forth herein and provided that each of the Seller and the Servicer is given an opportunity to review and reasonably negotiate in good faith the content of such documents not specifically referenced or provided for herein;
(iii) to make all the representations and warranties set forth in Section 3.01 and solely with respect to the Seller, Section 3.02, as of the date of the Whole Loan Transfer or Pass-Through Transfer, as specified in a letter from the Purchaser to the Seller and the Servicer (substantially in the form of Exhibit I hereto) indicating the date of the Whole Loan Transfer or Pass-Through Transfer and the applicable Revolving Credit Loans. No other document need be prepared indicating that the Seller and the Servicer are making such representations and warranties as to the applicable Revolving Credit Loans as of such date;
(iv) to negotiate and execute one or more master servicing agreements between the Servicer and any third party servicer which is servicing loans on behalf of the Purchaser providing for the Servicer to master service such Revolving Credit Loans on behalf of the Purchaser;
(v) to negotiate and execute one or more subservicing agreements between the Servicer and any master servicer which is generally considered to be a prudent master servicer in the secondary mortgage market designated by the Purchaser in its sole discretion after consultation with the Servicer and/or one or more custodial and servicing agreements among the Purchaser or an affiliate of the Purchaser, the Servicer and a third party custodian/trustee which is generally considered to be a prudent custodian/trustee in the secondary mortgage market designated by the Purchaser in its sole discretion after consultation with the Servicer, in either case for the purpose of pooling the Revolving Credit Loans with other Revolving Credit Loans for resale or securitization;
(vi) in connection with any securitization of any Revolving Credit Loans, to execute a pooling and servicing agreement, which pooling and servicing agreement may, at the Purchaser’s direction, contain contractual provisions including, but not limited to, servicing and Revolving Credit Loan representations and warranties which in form and substance conform to secondary market and Agency standards for securities backed by Revolving Credit Loans similar to the Revolving Credit Loans and such provisions with regard to servicing responsibilities, investor reporting (including without limitation, the obligation to deliver an officer’s certificate related to the Sarbanes-Oxley Act of 2002 to the depositor, the master servicer, if any, and the trustee in the form attached hereto as Exhibit K), segregation and deposit of principal and interest payments, custody of the Revolving Credit Loans, and other covenants as are required by the Purchaser and one or more nationally recognized rating agencies for “AAA” rated mortgage pass-through transactions which are “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984, unless otherwise mutually agreed. At the sole option of the Purchaser, any REMIC residual class issued pursuant to any pooling agreement may be transferred to the Servicer;
(vii) with respect to any Pass-Through Transfer, the Purchaser or its designee shall be permitted to issue securities under the Seller’s Registration Statement, provided that the Seller shall be reimbursed for any reasonable costs and expenses in connection with such issuance of securities;
(viii) in connection with any Pass-Through Transfer, the Seller will be obligated to fund all Draws and will be reimbursed for such Draws from distributions on a variable-funding note issued by such Pass-Through Transfer;
(ix) to deliver to the Purchaser and to any Person designated by the Purchaser (a) for inclusion in any prospectus or other offering material such publicly available information regarding the Seller and the Servicer, its financial condition and its Revolving Credit Loan delinquency, foreclosure and loss experience and any additional information requested by the Purchaser, (b) any similar non public, unaudited financial information (which the Purchaser may, at its option and at its cost, have audited by certified public accountants) and such other information as is reasonably requested by the Purchaser and which the Seller and the Servicer are capable of providing without unreasonable effort or expense, and to indemnify the Purchaser and its affiliates for material misstatements or omissions contained in such information, and (c) at the Purchaser’s expense, such statements and audit letters of reputable, certified public accountants pertaining to information provided by the Seller and the Servicer pursuant to clause (a) above as shall be reasonably requested by the Purchaser; and
(x) to deliver to the Purchaser, and to any Person designated by the Purchaser, opinions of counsel in a form reasonably acceptable to the Purchaser as are customarily delivered by sellers and servicers and reasonably determined by the Purchaser to be necessary in connection with Whole Loan Transfers or Pass-Through Transfers, as the case may be, it being understood that the cost of any opinions of counsel (other than in-house counsel) that may be required for a Whole Loan Transfer or Pass-Through Transfer, as the case may be, shall be the responsibility of the Purchaser.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Successor to the Servicer.
Prior to termination of Servicer’s responsibilities and duties under this Agreement pursuant to Section 4.13, 8.04, 9.01, 10.01 or 10.02, the Purchaser shall (i) succeed to and assume all of the Servicer’s responsibilities, rights, duties and obligations under this Agreement, or (ii) appoint a successor having the characteristics set forth in Section 8.02 hereof and which shall succeed to all rights and assume all of the responsibilities, duties and liabilities of the Servicer under this Agreement prior to the termination of the Servicer’s responsibilities, duties and liabilities under this Agreement. In connection with such appointment and assumption, the Purchaser may make such arrangements for the compensation of such successor out of payments on Revolving Credit Loans as the Purchaser and such successor shall agree. In the event that the Servicer’s duties, responsibilities and liabilities under this Agreement should be terminated pursuant to the aforementioned Sections, the Servicer shall discharge such duties and responsibilities during the period from the date it acquires knowledge of such termination until the effective date thereof with the same degree of diligence and prudence which it is obligated to exercise under this Agreement, and shall take no action whatsoever that might impair or prejudice the rights or financial condition of its successor. The resignation or removal of the Servicer pursuant to the aforementioned Sections shall not become effective until a successor shall be appointed pursuant to this Section and shall in no event relieve the Servicer of the representations and warranties made pursuant to Sections 3.01 and the indemnification obligations of the Servicer pursuant to Section 8.01.
Any successor appointed as provided herein shall execute, acknowledge and deliver to the Servicer and to the Purchaser an instrument accepting such appointment, whereupon such successor shall become fully vested with all the rights, powers, duties, responsibilities, obligations and liabilities of the Servicer, with like effect as if originally named as a party to this Agreement. Any termination or resignation of the Servicer or this Agreement pursuant to Section 4.13, 8.04, 8.05, 9.01, 10.01 or 10.02 shall not affect any claims that the Purchaser may have against the Servicer arising prior to any such termination or resignation.
The Servicer shall promptly deliver to the successor the funds in the Custodial Account and the Escrow Account and the Mortgage Files and related documents and statements held by it hereunder and the Servicer shall account for all funds. The Servicer shall execute and deliver such instruments and do such other things all as may reasonably be required to more fully and definitely vest and confirm in the successor all such rights, powers, duties, responsibilities, obligations and liabilities of the Servicer. The successor shall make arrangements as it may deem appropriate to reimburse the Servicer for unrecovered Servicing Advances which the successor retains hereunder and which would otherwise have been recovered by the Servicer pursuant to this Agreement but for the appointment of the successor servicer.
Upon a successor’s acceptance of appointment as such, the Servicer shall notify by mail the Purchaser of such appointment.
Section 12.02. Amendment.
This Agreement may be amended from time to time by the Seller, the Servicer and the Purchaser by written agreement signed by the Seller, the Servicer and the Purchaser.
Section 12.03. Recordation of Agreement.
Section 12.04. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of law provisions, except to the extent preempted by Federal law. The obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.
Section 12.05. Notices.
Any demands, notices or other communications permitted or required hereunder shall be in writing and shall be deemed conclusively to have been given if personally delivered at or mailed by registered mail, postage prepaid, and return receipt requested or certified mail, return receipt requested, or transmitted by telex, telegraph or telecopier and confirmed by a similar mailed writing, as follows:
(i) if to the Seller:
100 Wood Hollow Drive
Novato, CA 94945
Fax: 706-641-4452
Attention: Steve Abreu
(ii) if to the Servicer:
2300 Brookstone Centre Parkway
Columbus, GA 31909
Fax: 706-641-4452
Attention: Michael DeFrancesco
(iii) if to the Purchaser:
Mac Arthur Ridge II
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038 Attention:
or such other address as may hereafter be furnished to the other party by like notice. Any such demand, notice or communication hereunder shall be deemed to have been received on the date delivered to or received at the premises of the addressee (as evidenced, in the case of registered or certified mail, by the date noted on the return receipt).
Section 12.06. Severability of Provisions.
Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Revolving Credit Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof. If the invalidity of any part, provision, representation or warranty of this Agreement shall deprive any party of the economic benefit intended to be conferred by this Agreement, the parties shall negotiate, in good faith, to develop a structure the economic effect of which is nearly as possible the same as the economic effect of this Agreement without regard to such invalidity.
Section 12.07. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.
Section 12.08. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(ii) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;
(iii) references herein to “Articles,” “Sections,” Subsections,” “Paragraphs,” and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(v) the words “herein,” “hereof,” “hereunder,” and other words of similar import refer to this Agreement as a whole and not to any particular provision;
(vi) the term “include” or “including” shall mean without limitation by reason of enumeration; and
(vii) headings of the Articles and Sections in this Agreement are for reference purposes only and shall not be deemed to have any substantive effect.
Section 12.09. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without limitation, (i) consents, waivers and modifications which may hereafter be executed, (ii) documents received by any party at the closing, and (iii) financial statements, certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.
Section 12.10. Confidentiality of Information.
Each party recognizes that, in connection with this Agreement, it may become privy to non-public information regarding the financial condition, operations and prospects of the other party. Except as required by law, each party agrees to keep all non-public information regarding the other party strictly confidential, and to use all such information solely in order to effectuate the purpose of the Agreement, provided that each party may provide confidential information to its employees, agents and affiliates who have a need to know such information in order to effectuate the transaction, provided further that such information is identified as confidential non-public information. In addition, confidential information may be provided to a regulatory authority with supervisory power over the Purchaser, provided such information is identified as confidential non-public information.
Section 12.11. Recordation of Assignments of Mortgage.
Section 12.12. Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Seller or the Servicer hereof, to assign, in whole or in part, its interest under this Agreement with respect to some or all of the Revolving Credit Loans, and designate any person to exercise any rights of the Purchaser hereunder, by executing an Assignment, Assumption and Recognition Agreement substantially in the form of Exhibit D hereto and the assignee or designee shall accede to the rights and obligations hereunder of the Purchaser with respect to such Revolving Credit Loans. In no event shall the Purchaser sell a partial interest in any Revolving Credit Loan without the written consent of the Seller, which consent shall not be unreasonably denied. All references to the Purchaser in this Agreement shall be deemed to include its assignee or designee.
Section 12.13. No Partnership.
Section 12.14. Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same agreement. Subject to Section 8.02, this Agreement shall inure to the benefit of and be binding upon the Seller, the Servicer and the Purchaser and their respective successors and assigns.
Section 12.15. Entire Agreement.
Each of the parties to this Agreement acknowledges that no representations, agreements or promises were made to any of the other parties to this Agreement or any of its employees other than those representations, agreements or promises specifically contained herein. This Agreement and the related Purchase Price and Terms Letter set forth the entire understanding between the parties hereto and shall be binding upon all successors of all of the parties. In the event of any inconsistency between a Purchase Price and Terms Letter and this Agreement, this Agreement shall control.
Section 12.16. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not take any action or permit or cause any action to be taken by any of its agents or affiliates, or by any independent contractors on the Seller’s behalf, to personally, by telephone, by mail, or electronically by e-mail or through the Internet or otherwise, solicit the borrower or obligor under any Revolving Credit Loan to refinance the Revolving Credit Loan, in whole or in part, without the prior written consent of the Purchaser. It is understood and agreed that all rights and benefits relating to the solicitation of any Mortgagors to refinance any Revolving Credit Loans and the attendant rights, title and interest in and to the list of such Mortgagors and data relating to their Mortgages (including insurance renewal dates) shall be transferred to the Purchaser pursuant hereto on the Closing Date and the Seller shall take no action to undermine these rights and benefits. Notwithstanding the foregoing, it is understood and agreed that promotions undertaken by the Seller or any affiliate of the Seller which are directed to the general public at large, or segments thereof, including, without limitation, mass mailing based on commercially acquired mailing lists, newspaper, radio and television advertisements shall not constitute solicitation under this Section 12.16; provided, that (i) no segment shall consist primarily of the borrowers or obligors under the Revolving Credit Loans and (ii) such solicitation is not based upon data or lists derived from loan-level data for the Revolving Credit Loans. This Section 12.16 shall not be deemed to preclude the Seller or any of its affiliates from soliciting any Mortgagor for any other financial products or services. The Seller shall use its best efforts to prevent the sale of the name of any Mortgagor to any Person who is not an affiliate of the Seller.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.
EMC MORTGAGE CORPORATION
Purchaser

By:
Name:
Title:


GREENPOINT MORTGAGE FUNDING, INC.
Seller

By:
Name:
Title:
Exhibit A-1
Contents of Mortgage File
With respect to each Revolving Credit Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser, and which shall be retained by the Seller in the Servicing File or delivered to the Purchaser or its designee pursuant to Sections 2.04 and 2.05 of the Seller’s Purchase, Warranties and Servicing Agreement.
1. The original Mortgage Note endorsed “Pay to the order of ________ without recourse,” and signed in the name of the Seller by an authorized officer, with all intervening endorsements showing a complete chain of title from the originator to the Seller. If the Revolving Credit Loan was acquired by the Seller in a merger, the endorsement must be by “[Seller], successor by merger to the [name of predecessor]”. If the Revolving Credit Loan was acquired or originated by the Seller while doing business under another name, the endorsement must be by “[Seller] formerly known as [previous name]”. If the original note is unavailable, Seller will provide an affidavit of lost note (in form acceptable to the Purchaser) stating that the original Mortgage Note was lost or destroyed, together with a copy of such Mortgage Note and indemnifying the Purchaser against any and all claims arising as a result of any person or entity claiming they are the holder of the note or that the note has been paid off and returned.
2. A true certified copy, certified by the [title insurer], of the applicable First Lien.
3. The original Mortgage with evidence of recording thereon, or a copy thereof certified by the public recording office in which such mortgage has been recorded or, if the original Mortgage has not been returned from the applicable public recording office, a true certified copy, certified by the [title insurer], of the original Mortgage together with a certificate of the Seller certifying that the original Mortgage has been delivered for recording in the appropriate public recording office of the jurisdiction in which the Mortgaged Property is located.
4. Except with respect to any MERS Loan, the original Assignment, from the Seller in accordance with Purchaser’s instructions, which assignment shall, but for any blanks requested by the Purchaser, be in form and substance acceptable for recording, or a copy certified by the Seller as a true and correct copy of the original Assignment which has been sent for recordation. If the Revolving Credit Loan was acquired or originated by the Seller while doing business under another name, the Assignment must be by “[Seller] formerly known as [previous name]”.
5. Either (a) the original policy of title insurance, including riders and endorsements thereto, or if the policy has not yet been issued, a written commitment or interim binder or preliminary report of title issued by the title insurance or escrow company or (b) title search or (c) guaranty title.
6. Originals of all recorded intervening Assignments, or copies thereof, certified by the public recording office in which such Assignments have been recorded showing a complete chain of title from the originator to the Seller, with evidence of recording thereon, or a copy thereof certified by the public recording office in which such Assignment has been recorded or, if the original Assignment has not been returned from the applicable public recording office, a true certified copy, certified by the [title insurer] of the original Assignment together with a certificate of the [title insurer] certifying that the original Assignment has been delivered for recording in the appropriate public recording office of the jurisdiction in which the Mortgaged Property is located.
7. Originals, or copies thereof certified by the public recording office in which such documents have been recorded, of each assumption, extension, modification, written assurance or substitution agreements, if applicable, or if the original of such document has not been returned from the applicable public recording office, a true certified copy, certified by the [title insurer], of such original document together with certificate of Seller certifying the original of such document has been delivered for recording in the appropriate recording office of the jurisdiction in which the Mortgaged Property is located.
8. If the Mortgage Note or Mortgage or any other material document or instrument relating to the Revolving Credit Loan has been signed by a person on behalf of the Mortgagor, the original power of attorney or other instrument that authorized and empowered such person to sign bearing evidence that such instrument has been recorded, if so required in the appropriate jurisdiction where the Mortgaged Property is located (or, in lieu thereof, a duplicate or conformed copy of such instrument, together with a certificate of receipt from the recording office, certifying that such copy represents a true and complete copy of the original and that such original has been or is currently submitted to be recorded in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located), or if the original power of attorney or other such instrument has been delivered for recording in the appropriate public recording office of the jurisdiction in which the Mortgaged Property is located.
9. Either a title policy or guaranty title with respect to the related Mortgaged Property.
Notwithstanding anything to the contrary herein, the Seller may provide one certificate for all of the Revolving Credit Loans indicating that the documents were delivered for recording.
Exhibit A-2
Contents of Servicing File
With respect to each Revolving Credit Loan, the Servicing File shall include each of the following items, which shall be available for inspection by the Purchaser:
1. Revolving Credit Loan closing statement (Form HUD-1) and any other truth-in-lending or real estate settlement procedure forms required by law.
2. Residential loan application.
3. Uniform underwriter and transmittal summary (Fannie Mae Form 1008) or reasonable equivalent.
4. Credit report on the mortgagor.
5. Business credit report, if applicable.
6. Residential appraisal report and attachments thereto.
7. Verification of employment and income except for Revolving Credit Loans originated under a Limited Documentation Program, all in accordance with Seller’s Underwriting Standards.
8. Verification of acceptable evidence of source and amount of down payment, in accordance with Seller’s underwriting guidelines.
9. Photograph of the Mortgaged Property (may be part of appraisal).
10. Survey of the Mortgaged Property, if any.
11. Sales contract, if applicable.
12. If available, termite report, structural engineer’s report, water portability and septic certification.
13. Any original security agreement, chattel mortgage or equivalent executed in connection with the Mortgage.
14. Any ground lease, including all amendments, modifications and supplements thereto.
15. Any other document required to service the Revolving Credit Loans.
Exhibit B
Form of Custodial Account Letter Agreement
________________________, 2004
To:
As “Servicer” under the Seller’s Purchase, Warranties and Servicing Agreement, dated as of October 18, 2004 Revolving Credit Loans Series 2004 -1 (the “Agreement”), we hereby authorize and request you to establish an account, as a Custodial Account pursuant to Section 4.04 of the Agreement, to be designated as “GreenPoint Mortgage Funding, Inc., in trust for EMC Mortgage Corporation, Owner of Revolving Credit Loans Series 2004 -1”. All deposits in the account shall be subject to withdrawal therefrom by order signed by the Servicer. This letter is submitted to you in duplicate. Please execute and return one original to us.

	SERVICER

	By:
	Name:
	Title:
The undersigned, as “Depository,” hereby certifies that the above described account has been established under Account Number ____________________, at the office of the depository indicated above, and agrees to honor withdrawals on such account as provided above.



	By:
	Name:
	Title:
Exhibit C
Form of Escrow Account Letter Agreement
________________________, 2004
To:
As “Servicer” under the Seller’s Purchase, Warranties and Servicing Agreement, dated as of October 18, , 2004, Revolving Credit Loans Series 2004-1 (the “Agreement”), we hereby authorize and request you to establish an account, as an Escrow Account pursuant to Section 4.06 of the Agreement, to be designated as “GreenPoint Mortgage Funding, Inc., in trust for EMC Mortgage Corporation, Owner of Revolving Credit Loans Series 2004-1 and various Mortgagors.” All deposits in the account shall be subject to withdrawal therefrom by order signed by the Servicer. This letter is submitted to you in duplicate. Please execute and return one original to us.

	SERVICER

	By:
	Name:
	Title:



	By:
	Name:
	Title:
Exhibit D
Form of Assignment, Assumption and Recognition Agreement
This Assignment, Assumption and Recognition Agreement (this “Assignment Agreement”), dated as of ________, between EMC Mortgage Corporation, a Delaware corporation liability corporation (the “Assignor”), ____________, a _________ corporation (the “Assignee”), and Greenpoint Mortgage Funding, Inc. (the “Seller”):
For good and valuable consideration the receipt and sufficiency of which hereby are acknowledged, and of the premises and mutual covenants herein contained, the parties hereto hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all of the right, title and interest of Assignor, as Purchaser, in, to and under (a) those certain Revolving Credit Loans listed on Exhibit A attached hereto (the “Revolving Credit Loans”); and (b) the Seller’s Purchase, Warranties and Servicing Agreement dated as of _______, but only to the extent of the Revolving Credit Loans (the “Purchase Agreement”). For purposes of this Assignment Agreement, the term “Purchase Agreement” includes any separate bill of sale, assignment and conveyance or other instrument pursuant to which Seller and Assignor effectuated the purchase and sale of any Revolving Credit Loan following the execution and delivery of the Seller’s Purchase, Warranties and Servicing Agreement dated as of __________.
The Assignor specifically reserves and does not assign to the Assignee hereunder any and all right, title and interest in, to and under any all obligations of the Assignor with respect to any Revolving Credit Loans subject to the Purchase Agreement which are not the Revolving Credit Loans set forth on Exhibit A attached hereto and are not the subject of this Assignment Agreement.
2. Each of the Seller and the Assignor represent and warrant to the Assignee that (a) the copy of the Purchase Agreement, attached hereto as Exhibit B, provided to the Assignee, is a true, complete and accurate copy of the Purchase Agreement, (b) the Purchase Agreement is in full force and effect as of the date hereof, (c) the provisions thereof have not been waived, amended or modified in any respect, nor have any notices of termination been given thereunder, (d) the Purchase Agreement contains all of the terms and conditions governing the sale of the Revolving Credit Loans by Seller to Assignor and the purchase of the Revolving Credit Loans by Assignor from Seller; provided, however, that the date of purchase and sale and the amount of payment for the Revolving Credit Loans may be set out in a Purchase Price and Terms Letter, as defined in the Purchase Agreement, and (e) Seller sold, conveyed and transferred each Revolving Credit Loan to Assignor pursuant to the Purchase Agreement.
3. The Assignor warrants and represents to, and covenants with, the Assignee and the Seller that:
(a) As of the date hereof, the Assignor is not in default under the Purchase Agreement;
(b) The Assignor is the lawful owner of the Revolving Credit Loans with the full right to transfer the Revolving Credit Loans and any and all of its interests, rights and obligations under the Purchase Agreement, free from any and all claims and encumbrances arising out of the Assignor’s ownership thereof, and the Revolving Credit Loans, as well as the Purchase Agreement, upon the transfer thereof to the Assignee as contemplated herein, shall be free and clear of all such liens, claims and encumbrances or any lien, claim or encumbrance arising out of the ownership of the Revolving Credit Loans by any person at any time after Assignor first acquired any Revolving Credit Loan from the Seller;
(c) The Assignor has not received notice of, and has no knowledge of, any offsets, counterclaims or other defenses available to the Seller with respect to the Purchase Agreement or the Revolving Credit Loans;
(d) The Assignor has not waived or agreed to any waiver under, or agreed to any amendment or other modification of, the Purchase Agreement or the Revolving Credit Loans. The Assignor has no knowledge of, and has not received notice of, any waivers under or amendments or other modifications of, or assignments of rights or obligations under or defaults under, the Purchase Agreement, or the Revolving Credit Loans;
(e) The Assignor is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite corporate power and authority to sell, transfer and assign the Revolving Credit Loans;
(f) The Assignor has full corporate power and authority to execute, deliver and perform under this Assignment Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this Assignment Agreement is in the ordinary course of the Assignor’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of the Assignor’s charter or by-laws, or any legal restriction, or any material agreement or instrument to which the Assignor is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Assignor or its property is subject. The execution, delivery and performance by the Assignor of this Assignment Agreement, and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action of the Assignor. This Assignment Agreement has been duly executed and delivered by the Assignor and constitutes the valid and legally binding obligation of the Assignor enforceable against the Assignor in accordance with its respective terms except as enforceability thereof may be limited by bankruptcy, insolvency, or reorganization or other similar laws now or hereinafter in effect relating to creditor’s rights generally and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or in law;
(g) No material consent, approval, order or authorization of, or declaration, filing or registration with, any governmental entity is required to be obtained or made by the Assignor in connection with the execution, delivery or performance by the Assignor of this Assignment Agreement, or the consummation by it of the transactions contemplated hereby; and
(h) The Assignor has paid the purchase price for the Revolving Credit Loans and has satisfied any conditions to closing required of it under the terms of the Purchase Agreement.
4. The Assignee warrants and represents to, and covenants with, the Assignor and the Seller that:
(a) The Assignee is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite corporate power and authority to acquire, own and purchase the Revolving Credit Loans;
(b) The Assignee has full corporate power and authority to execute, deliver and perform under this Assignment Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this Assignment Agreement is in the ordinary course of the Assignee’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of the Assignee’s charter or by-laws, or any legal restriction, or any material agreement or instrument to which the Assignee is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Assignee or its property is subject. The execution, delivery and performance by the Assignee of this Assignment Agreement, and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action of the Assignee. This Assignment Agreement has been duly executed and delivered by the Assignee and constitutes the valid and legally binding obligation of the Assignee enforceable against the Assignee in accordance with its respective terms except as enforceability thereof may be limited by bankruptcy, insolvency, or reorganization or other similar laws now or hereinafter in effect relating to creditor’s rights generally and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or in law;
(c) No material consent, approval, order or authorization of, or declaration, filing or registration with, any governmental entity is required to be obtained or made by the Assignee in connection with the execution, delivery or performance by the Assignee of this Assignment Agreement, or the consummation by it of the transactions contemplated hereby; and
(d) The Assignee agrees to be bound, as Purchaser, by all of the terms, covenants and conditions of the Purchase Agreement and the Revolving Credit Loans, and from and after the date hereof, the Assignee assumes for the benefit of each of the Seller and the Assignor all of the Assignor’s obligations as Purchaser thereunder, with respect to the Revolving Credit Loans.
5. The Seller warrants and represents to, and covenants with, the Assignor and the Assignee that:
(a) The Seller is not a natural person or a general partnership and is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and has all requisite power and authority to service the Revolving Credit Loans;
(b) The Seller has full power and authority to execute, deliver and perform under this Assignment Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this Assignment Agreement is in the ordinary course of the Seller’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of the Seller’s charter or by-laws, or any legal restriction, or any material agreement or instrument to which the Seller is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Seller or its property is subject. The execution, delivery and performance by the Seller of this Assignment Agreement, and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action of the Seller. This Assignment Agreement has been duly executed and delivered by the Seller and constitutes the valid and legally binding obligation of the Seller enforceable against the Seller in accordance with its respective terms except as enforceability thereof may be limited by bankruptcy, insolvency, or reorganization or other similar laws now or hereinafter in effect relating to creditors’ rights generally and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or in law;
(d) No material consent, approval, order or authorization of, or declaration, filing or registration with, any governmental entity is required to be obtained or made by the Seller in connection with the execution, delivery or performance by the Seller of this Assignment Agreement, or the consummation by it of the transactions contemplated hereby;
(e) As of the date hereof, the Seller is not in default under the Purchase Agreement; and
(f) No event has occurred or has failed to occur, during the period commencing on date on which Assignor acquired the Revolving Credit Loans and ending on the date hereof, inclusive, which would make the representations and warranties set forth in Section 3.02 of the Purchase Agreement untrue if such representations and warranties were made with respect to the Revolving Credit Loans effective as of the date hereof.
Within sixty (60) days of the earlier of either, discovery by the Seller or notice to the Seller from the Assignee, of a breach of any of the foregoing representations and warranties with respect to a Revolving Credit Loan which materially and adversely affects the value of such Revolving Credit Loan or the Assignee’s interests therein, the Seller shall use its best efforts to cure such breach in all material respects and, if such breach is not cured within such sixty (60) day period, the Seller shall, at the Assignee’s option, repurchase such Revolving Credit Loan at a price equal to the unpaid principal balance of the Revolving Credit Loan as of the date or repurchase, plus accrued interest thereon to, but not including, the date of repurchase.
In connection with any repurchase of a Revolving Credit Loan, the Assignee shall reassign the provisions of the Purchase Agreement to the Seller with respect to such Revolving Credit Loan, and provide for the prompt delivery of the related custodial file to the Seller or its designee, as applicable.
6. From and after the date hereof, the Seller shall recognize the Assignee as the owner of the Revolving Credit Loans, and shall look solely to the Assignee for performance from and after the date hereof of the Assignor’s obligations with respect to the Revolving Credit Loans. Effective the date hereof, the Seller, the Assignor and the Assignee agree that with respect to the Revolving Credit Loans, the servicing provisions of the Purchase Agreement shall be restated and amended to conform to [enter servicing standard here]; provided, however, that Seller shall service the Revolving Credit Loans for a fixed servicing fee of ________ per Revolving Credit Loan per month. The obligation of the Assignee to compensate the Seller for servicing of the Revolving Credit Loans shall survive the sale by the Assignee to any trust created for the purpose of securitizing the Revolving Credit Loans, and Assignee agrees not to assign its obligation to pay the servicing fee to any such trust. Assignee may assign its obligation to pay the servicing fee to the person to which Assignee transfers the mortgage servicing rights for the Revolving Credit Loans. Seller acknowledges receipt of the [name of servicing guide related to the servicing standard stated above].
7. [Reserved]
8. Notice Addresses.
(a) The Assignee’s address for purposes of all notices and correspondence related to the Revolving Credit Loans and this Assignment Agreement is:
	_______________
	_______________
	_______________
	Attention:________________
(b) The Assignor’s address for purposes for all notices and correspondence related to the Revolving Credit Loans and this Assignment Agreement is:
	EMC Mortgage Corporation
	Mac Arthur Ridge II
	909 Hidden Ridge Drive, Suite 200
	Irving, Texas 75038
	Fax:
(c) The Seller’s address for purposes of all notices and correspondence related to the Revolving Credit Loans and this Assignment Agreement is:
	Greenpoint Mortgage Funding, Inc.
	_______________
	_______________
	Attention:________________
9. This Assignment Agreement shall be construed in accordance with the substantive laws of the State of New York (without regard to conflict of laws principles) and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws, except to the extent preempted by federal law.
10. This Assignment Agreement shall inure to the benefit of the successors and assigns of the parties hereto. Any entity into which the Seller, the Assignor or the Assignee may be merged or consolidated shall, without the requirement for any further writing, be deemed the Seller, the Assignor or the Assignee, respectively, hereunder.
11. No term or provision of this Assignment Agreement may be waived or modified unless such waiver or modification is in writing and signed by the party against whom such waiver or modification is sought to be enforced.
12. This Assignment Agreement shall survive the conveyance of the Revolving Credit Loans and the assignment of the Purchase Agreement by the Assignor.
13. Notwithstanding the assignment of the Purchase Agreement by either the Assignor or Assignee, this Assignment Agreement shall not be deemed assigned by the Seller or the Assignor unless assigned by separate written instrument.
14. For the purpose for facilitating the execution of this Assignment Agreement as herein provided and for other purposes, this Assignment Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute and be one and the same instrument.
[signatures on following page]
IN WITNESS WHEREOF, the parties have caused this Assignment Agreement to be executed by their duly authorized officers as of the date first above written.
	EMC MORTGAGE CORPORATION

	Assignor

	By:
	Name:
	Title:


			,
	Assignee


	By:
	Name:
	Title:


	GREENPOINT MORTGAGE FUNDING, INC.,
	Seller

	By:
	Name:
	Title:
Exhibit E
Form of Monthly Servicing Report
Reports:
On the reporting date, the Purchaser shall have received from the Servicer electronic information related to each mortgage loan serviced on behalf of the Purchaser. All reports shall be generated by the Servicer’s loan servicing system and outline loan activity that transpired during the immediately preceding calendar month.
All electronic information shall contain and be sorted by the Purchaser’s loan identification number as well as contain the Servicer’s loan identification number. Information regarding the Purchaser’s inventory must be clearly separated from that reported to other investors.
Each remittance must be clearly reconciled to detailed loan level remittance information. All adjustments between information sent and actual remittance must be identifiable at loan level.
The mortgage loans transferred in and mortgage loans transferred out must be reconciled to collective notices of servicing transfer or sale notices received effective during the respective Due Period. A monthly reconciliation of new loans added and loans removed must be submitted.
The monthly electronic remittance file shall include the following data elements at a minimum.
Field Name		Field Description	Field Type
SAMPLE CO Loan #	Required	The loan identification number assigned by SAMPLE CO	Numeric, no comma's and no special characters (i.e $ and %)
Previous Servicer Loan #			Numeric, no comma's and no special characters (i.e $ and %)
Servicer loan number	Required	Servicer loan number	Numeric, no comma's and no special characters (i.e $ and %)
Actual interest collected		Actual Interest amount collected from borrower (at note rate)	Signed Numeric, no comma's and no special characters (i.e $ and %)
Fnma Action code	Required	Standard FNMA Action Code for payoff loans coded with 60-69 series of action code	Numeric, no comma's and no special characters (i.e $ and %)
Fnma Action date	Required	Payoff date ( I.e., 01-MAY-2001)	Date : DD-MMM-CCYY
Interest remitted	Required	Net Interest dollars remitted. Actual interest dollars collected from borrower less service fee.	Signed Numeric, no comma's and no special characters (i.e $ and %)
Beginning Scheduled note rate	Required if reporting Scheduled / Scheduled	Scheduled note rate used to calculate the payment being reported Only apply to Scheduled/Scheduled Loans. If this is an Actual/Actual loan, leave blank	Signed Numeric, no comma's and no special characters (i.e $ and %)
Beginning Scheduled P&I payment	Required if reporting Scheduled / Scheduled	Scheduled P&I payment amount used to calculate the payment being reported Only apply to Scheduled/Scheduled Loans. If this is an Actual/Actual loan, leave blank	Signed Numeric, no comma's and no special characters (i.e $ and %)
Beginning Scheduled service fee rate	Required if reporting Scheduled / Scheduled	Scheduled service fee rate used to calculate the payment being reported Only apply to Scheduled/Scheduled Loan. If this is an Actual/Actual loan, leave blank	Signed Numeric, no comma's and no special characters (i.e $ and %)
Ending Due Date	Required	Loan due date per trial balance report (I.e., 01-MAY-2001)	Date : DD-MMM-CCYY
Ending Current rate	Required	Current Note rate per trial balance report	Signed Numeric, no comma's and no special characters (i.e $ and %)
Ending participant UPB	Required	Ending participant principal balance (Always equal to the 'Ending 100% UPB' for wholly owned loans)	Signed Numeric, no comma's and no special characters (i.e $ and %)
Ending 100% P&I pmt	Required	Ending 100% P&I payment amount	Signed Numeric, no comma's and no special characters (i.e $ and %)
Ending 100 %UPB	Required	Ending 100% principal balance	Signed Numeric, no comma's and no special characters (i.e $ and %)
Other fees remitted	Required	Fees remitted from Servicer This should be your share of the fees	Signed Numeric, no comma's and no special characters (i.e $ and %)
Principal remitted	Required	Total Principal amount remitted (includes curtailments and payoffs)	Signed Numeric, no comma's and no special characters (i.e $ and %)
Ending Service fee rate	Required	Current Service Fee rate per trial balance report	Signed Numeric, no comma's and no special characters (i.e $ and %)
Ending Security Balance	Required if reporting Scheduled / Scheduled	Ending security balance Only apply to Scheduled/Scheduled Loan. If this is an Actual/Actual loan, leave blank	Signed Numeric, no comma's and no special characters (i.e $ and %)
Servicer Name	Required	Servicer Name	Text
Servicer’s Investor Code	Required	The distinct investor code assigned by the servicer to the pool of mortgage loans being reported to identify the loans separate from other pools being serviced	Text
Servicer Investor Code 1		Code utilized by Servicer to segregate and identify each pool of mortgage loans
Servicer Investor Code 2		Additional code utilized by Servicer to further segregate and identify subset of mortgage loans within Servicer Investor Code 1
Primary Borrower Last Name			Text
Primary Borrower Social Security Number			Numeric, no comma's and no special characters (i.e $ and %)
Property Street Address			Text
Property City			Text
Property State			Text, 2 characters
Property Zip Code			Numeric, no comma's and no special characters (i.e $ and %)
From time to time, the Purchaser may reasonably request servicer to add or modify information being reported on the electronic reports at the Servicer expense. Servicer’s must notify SAMPLE CO in the event servicing circumstances dictate file layout changes
In addition to the electronic information set forth above, the Servicer’s shall submit, on compact disc or other acceptable format, industry standard reports outlined below in addition to electronic information. The financial elements provided in the electronic information provided above must clearly reconcile to information set-forth in these reports. From time to time, the Purchaser may reasonably request the Servicer to add or remove standard industry reports at the Servicer’s expense.
Description of Report	Example: Reference Report Number (Alltel System)
Trial Balance	P139
Payments Collected showing split of Principal & Interest Payment	S215
Paid-in Full/Liquidation Reports	S214
Loans Removed -Transfers Out ^B	T62R
Curtailments	S213
New loans added/Transfers In ^B	T62B
Non-financial Adjustments Report
Payoffs / Interim Cutoff Report	S210
Pre-paid Loans (non-payoffs)	S212
Delinquent Loans
Arm Change Report	24N
Delivery:
Remittance reports and related electronic information not suitable for electronic transmission are to be delivered via overnight mail to the addressed to:
	SAMPLE CO

	SAMPLE ADDRESS
	SAMPLE CITY, STATE

	Fax:
	Attn:
Delivery of Electronic Reports:
Electronic data files shall be delivered to:
Delivery of Remittances:
Funds to be remitted pursuant to Section 5.01 shall be delivered via wire transfer using the following instructions:
	SAMPLE CO
	ABA:
	Account Name: SAMPLE CO
	Account Number:
	Attention:
	Phone: (
	Fax:
	Re:
S4801-5JE	GREENPOINT MORTGAGE FUNDING,INC	00/00/00
	MONTHLY REPORT OF PRINCIPAL ADVANCES	PAGE 307
LOAN NUMBER	PLAN CODE		CREDIT LIMIT		ADV NO		CHK NO		ADVANCE DATE		ADVANCE AMOUNT		PRINCIPAL BALANCE		OCA RSS		DESCRIPTION			NO

INVESTOR: XXX CATEGORY: 001:
0101320034		ESB3		50,000		30		4159		06-16-03		500.00		11,024.69					461899338
0101422806		ESB3		67,250		1		0159		06-18-03		150.00		150.00					452408277
0101554392		ESA3		12,800		2		0159		06-03-03		600.00		12,221.99					467988801
0101594257		ESA3		30,000		9		1259		06-16-03		650.00		29,917.77					451816429
0101618395		ESA3		88,600		6		0859		06-11-03		2,000.00		86,244.10					461119963
						7		0959		06-27-03		900.00		87,144.10					464430591
0101674398		ESA3		100,000		8		1159		06-16-03		15,000.00		35,000.00					461938203
0101700805		ESA3		64,000		5		0459		06-03-03		1,100.00		63,474.31					467996094
0101714939		ESB3		25,600		10		1059		06-25-03		650.00		25,479.36					453719652
0101718666		ESA3		130,000		19		0019		06-03-03		800.00		129,779.39			APPROVED REJECT
0101730257		ESA3		100,000		18		1759		06-27-03		2,000.00		99,465.77					464400493
0101759272		ESB3		49,900		1		0159		06-12-03		4,000.00		49,550.94					461340994
0101806289		ESA3		25,000		2		1159		06-19-03		1,400.00		24,516.69					462856677
0101809051		ESA3		123,700				0959		06-23-03		2,800.00		120,866.75					463354621		1020
						8		0009		06-24-03		2,800.00		123,666.75		Y	APPROVED UNAPPLIED				0020
0101809465		ESB3		100,000		31		0959		06-09-03		2,000.00		59,672.98					460341949
						32		1059		06-24-03		1,000.00		60,264.99					453472344
						33		3259		06-26-03		1,000.00		61,264.99					464246080
0101818805		ESA3		25,000		5		0459		06-30-03		300.00		24,474.98					464794586
0101823524		ESA1		132,000		12		1159		06-11-03		2,000.00		131,962.91					461112210
0101824753		ESA3		100,000		32		3259		06-03-03		2,000.00		99,096.92					467962528
0101829711		ESA3		60,000		21		0025		06-30-03		1,200.00		59,973.95			APPROVED REJECT
0101833648		ESB3		12,000		3		0259		06-26-03		117.00		11,889.21					464246122
0101842482		ESA3		50,000		15		1459		06-02-03		500.00		49,704.27					457619527
0101842565		ESA3		28,000		27		4559		06-04-03		200.00		27,892.46					468303854
						28		4659		06-25-03		200.00		27,991.89					453697385
0102480316		ESA3		50,000		6		1559		06-24-03		8,909.57		47,332.91					453512069
0102507506		ESA3		18,900		8		0759		06-09-03		211.98		18,762.23					460443921
APPLIED		TOTAL		8,278,550								52,268.55		6,759,813.48				158 TRANS	125 LOANS
UNAPPLIED		TOTAL		352,200								7,757.50		313,554.43				7 TRANS	5 LOANS
REVERSED		TOTAL		9,000								668.86-		1,820.61				1 TRAN	1 LOAN
Exhibit F
Revolving Credit Loan Schedule
Exhibit G
Request for Release of Documents and Receipt
RE: Revolving Credit Loan #_____________________________________________
BORROWER:_____________________________________________________
PROPERTY:______________________________________________________
Pursuant to a Seller’s Purchase, Warranties and Servicing Agreement (the “Agreement”) between the Seller, the Servicer and the Purchaser, the undersigned hereby certifies that he or she is an officer of the Servicer requesting release of the documents for the reason specified below. The undersigned further certifies that:
(Check one of the items below)
_____________	On ____________, the above captioned Revolving Credit Loan was paid in full or the Servicer has been notified that payment in full has been or will be escrowed. The Servicer hereby certifies that all amounts with respect to this loan which are required under the Agreement have been or will be deposited in the Custodial Account as required.
_____________	The above captioned loan is being repurchased pursuant to the terms of the Agreement. The Servicer hereby certifies that the repurchase price has been credited to the Custodial Account as required under the Agreement.
_____________	The above captioned loan is being placed in foreclosure and the original documents are required to proceed with the foreclosure action. The Servicer hereby certifies that the documents will be returned to the Purchaser in the event of reinstatement.
_____________	Other (explain)
All capitalized terms used herein and not defined shall have the meanings assigned to them in the Agreement.
Based on this certification and the indemnities provided for in the Agreement, please release to the Servicer all original mortgage documents in your possession relating to this loan.
Dated:	By:
	Signature


		Title
Send documents to:
Acknowledgment:
Purchaser hereby acknowledges that all original documents previously released on the above captioned Revolving Credit Loan have been returned and received by the Purchaser.
Dated:	By:
	Signature


		Title
Exhibit I
Form of Bring Down Letter
[On File]
Exhibit J
Wire Instructions
Funds to be remitted to the Purchaser pursuant to Section 5.01 of the Agreement shall be delivered via wire transfer using the following instructions:
BANK: CHASE BANK OF TEXAS
BRANCH: IRVING, TEXAS
ACCOUNT NAME: EMC MORTGAGE CORPORATION
ABA #: 113000609
ACCOUNT #: 07001227347
Reference: 020-20049-17 (cutoff date here) Remit for (servicer name here)
Attention: LSBO Group HELOCs
Electronic monthly remittance reports are to be prepared and submitted in accordance with contractual and any other requirements. The reports are to be sent to lsbogroup@bear.com
For Fidelity reporting system:
A/A - P139, S213, S214, S215
S/S - P139, S50Y, S213, S214, S215
For all other reporting systems:
A/A - excel remittance report, excel payoff report, excel trial balance
S/S - excel scheduled/scheduled report
A hardcopy backup of the monthly remittance report may be sent to:
EMC Mortgage Corporation
LSBO Group
909 Hidden Ridge
Suite 200
Irving, Texas 75038
Please direct any questions concerning these requirements or procedures to us at:
(972) 444-2864
e-mail us at lsbogroup@bear.com
Funds to be remitted to the Seller pursuant to Section 5.01 of the Agreement shall be delivered via wire transfer using the following instructions:
ABA:
Account Name:
Account Number:
Attention:
Re:
Exhibit K
Form of Officer’s Certificate related to Sarbanes-Oxley Act of 2002
This certificate is being delivered pursuant to Section _____ of the [Identify Agreement], dated as of ___________ (the “Agreement”), among __________________, as depositor, __________________, as seller and servicer, ______________, as master servicer (the “Master Servicer”) and securities administrator, and ____________________, as trustee. Capitalized terms used herein and not otherwise defined have the meanings set forth in the Agreement.
I certify that:
(i)
I am a ____________________ of GreenPoint Mortgage Funding, Inc. (‘GreenPoint).
(ii)
Based on my knowledge, the information in the Annual Statement of Compliance, the Annual Independent Public Accountant’s Servicing Report and all servicing reports, officer’s certificates and other information relating to the servicing of the Mortgage Loans submitted to the Master Servicer taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the date of this certification;
(ii) The servicing information required to be provided to the Master Servicer by GreenPoint under the Agreement has been provided to the Master Servicer;
(iii) I am responsible for reviewing the activities performed by GreenPoint under the Agreement and based upon the review required by the Agreement, and except as disclosed in the Annual Statement of Compliance or the Annual Independent Public Accountant’s Servicing Report submitted to the Master Servicer, GreenPoint has, as of the date of this certification fulfilled its obligations under the Agreement; and
(iv) I have disclosed to the Master Servicer all significant deficiencies relating to GreenPoint’s compliance with the minimum servicing standards in accordance with a review conducted in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar standard as set forth in the Agreement.
______________________
Dated: _________________
AMENDMENT NUMBER ONE
to the
SELLER’S PURCHASE, WARRANTIES AND SERVICING AGREEMENT
Dated as of September 20, 2006
between
EMC MORTGAGE CORPORATION,
as Purchaser
and
GREENPOINT MORTGAGE FUNDING, INC.,
as Company
This AMENDMENT NUMBER ONE (this “Amendment”) is made and entered into this 20^th of September, 2006, by and between EMC Mortgage Corporation, a Delaware corporation, as purchaser (the “Purchaser”) and GreenPoint Mortgage Funding, Inc., as company (the “Company”) in connection with the Seller’s Purchase, Warranties and Servicing Agreement, dated as of October 18, 2004, between the above mentioned parties (the “Agreement”).
RECITALS
WHEREAS, the parties hereto have entered into the Agreement;
WHEREAS, the Agreement provides that the parties thereto may enter into an amendment to the Agreement;
WHEREAS, the parties hereto desire to amend the Agreement as set forth in this Amendment to add necessary language for Regulation AB (as defined below) and to convert the Agreement into a flow agreement; and
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Agreement.
2. Article I of the Agreement is hereby amended effective as of the date hereof by adding the following definitions to Section 1.01:
Commission or SEC: The Securities and Exchange Commission.
Confirmation: The trade confirmation letter between the Purchaser and the Company.
Depositor: The depositor, as such term is defined in Regulation AB, with respect to any Securitization Transaction.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Master Servicer: With respect to any Securitization Transaction, the “master servicer,” if any, identified in the related transaction documents.
Pass-Through Transfer: Any transaction involving either (1) a sale or other transfer of some or all of the Revolving Credit Loans directly or indirectly to an issuing entity in connection with an issuance of publicly offered or privately placed, rated or unrated mortgage-backed securities or (2) an issuance of publicly offered or privately placed, rated or unrated securities, the payments on which are determined primarily by reference to one or more portfolios of residential Revolving Credit Loans consisting, in whole or in part, of some or all of the Revolving Credit Loans.
Prepayment Charge: Any prepayment premium, penalty or charge payable by a Mortgagor in connection with any Principal Prepayment on a Revolving Credit Loan pursuant to the terms of the related Mortgage Note.
Qualified Correspondent: Any Person from which the Company purchased Revolving Credit Loans, provided that the following conditions are satisfied: (i) such Revolving Credit Loans were originated pursuant to an agreement between the Company and such Person that contemplated that such Person would underwrite Revolving Credit Loans from time to time, for sale to the Company, in accordance with underwriting guidelines designated by the Company (“Designated Guidelines”) or guidelines that do not vary materially from such Designated Guidelines; (ii) such Revolving Credit Loans were in fact underwritten as described in clause (i) above and were acquired by the Company within 180 days after origination; (iii) either (x) the Designated Guidelines were, at the time such Revolving Credit Loans were originated, used by the Company in origination of Revolving Credit Loans of the same type as the Revolving Credit Loans for the Company’s own account or (y) the Designated Guidelines were, at the time such Revolving Credit Loans were underwritten, designated by the Company on a consistent basis for use by lenders in originating Revolving Credit Loans to be purchased by the Company; and (iv) the Company employed, at the time such Revolving Credit Loans were acquired by the Company, pre-purchase or post-purchase quality assurance procedures (which may involve, among other things, review of a sample of Revolving Credit Loans purchased during a particular time period or through particular channels) designed to ensure that Persons from which it purchased Revolving Credit Loans properly applied the underwriting criteria designated by the Company.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a sale or other transfer of some or all of the Revolving Credit Loans directly or indirectly to an issuing entity in connection with an issuance of publicly offered or privately placed, rated or unrated mortgage-backed securities or (2) an issuance of publicly offered or privately placed, rated or unrated securities, the payments on which are determined primarily by reference to one or more portfolios of residential Revolving Credit Loans consisting, in whole or in part, of some or all of the Revolving Credit Loans.
Servicing Criteria: As of any date of determination, the “servicing criteria” set forth in Item 1122(d) of Regulation AB, or any amendments thereto, a summary of the requirements of which as of the date hereof is attached hereto as Exhibit P for convenience of reference only. In the event of a conflict or inconsistency between the terms of Exhibit P and the text of Item 1122(d) of Regulation AB, the text of Item 1122(d) of Regulation AB shall control (or those Servicing Criteria otherwise mutually agreed to by the Purchaser, the Company and any Person that will be responsible for signing any Sarbanes Certification with respect to a Securitization Transaction in response to evolving interpretations of Regulation AB and incorporated into a revised Exhibit P).
Static Pool Information: Static pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not responsible for the overall servicing (as “servicing” is commonly understood by participants in the mortgage-backed securities market) of Revolving Credit Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Revolving Credit Loans under the direction or authority of the Company or a Subservicer.
Subservicer: Any Person that services Revolving Credit Loans on behalf of the Company or any Subservicer and is responsible for the performance (whether directly or through Subservicers or Subcontractors) of a substantial portion of the material servicing functions required to be performed by the Company under this Agreement or any applicable Reconstitution Agreement that are identified in Item 1122(d) of Regulation AB.
Term Sheet: A supplemental agreement iwhich shall be executed and delivered by the Company and the Purchaser to provide for the sale pursuant to the terms of this Agreement of the Revolving Credit Loans including all Servicing Rights related thereto listed on the Revolving Credit Loan Schedule attached thereto (or otherwise identified on the Term Sheet as the parties may agree).
Third-Party Originator: Each Person, other than a Qualified Correspondent, that originated Revolving Credit Loans acquired by the Company.
3. Article I of the Agreement is hereby amended effective as of the date hereof by deleting in its entirety the definitions of Closing Date, Cut-off Date, Principal Prepayment, Purchase Price Percentage, and Repurchase Price in Section 1.01 and replacing it with the following:
Closing Date: With respect to any Revolving Credit Loan, the Closing Date stated on the related Confirmation, or the related Term Sheet, or such other date mutually agreed upon by the parties hereto.
Cut-off Date: With respect to any Revolving Credit Loan, the Cut-off Date stated on the related Confirmation or the related Term Sheet.
Principal Prepayment: Any payment or other recovery of principal on a Revolving Credit Loan full or partial which is received in advance of its scheduled Due Date, including any Prepayment Charge and which is not accompanied by an amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.
Purchase Price Percentage: With respect to any Revolving Credit Loan, the Purchase Price Percentage stated in the related Term Sheet.
Repurchase Price: With respect to any Revolving Credit Loan, a price equal to (i) the product of the Purchase Price Percentage used to calculate the Purchase Price, as stated in the related Term Sheet and the outstanding principal balance of the Revolving Credit Loan, plus (ii) if applicable, accrued interest on such outstanding principal balance at the related Mortgage Interest Rate from the last date through which interest was last paid and distributed to the Purchaser to the date of repurchase, plus, (iii) with respect to any purchase by the Company pursuant to Section 3.03, any costs and damages actually incurred and paid by or on behalf of the Purchaser in connection with any breach of the representation and warranty set forth in Section 3.02(h), (aaa) and (bbb), as applicable, as a result of a violation of a predatory or abusive lending law applicable to such Revolving Credit Loan, plus, (iv) third party expenses incurred in connection with the transfer of the Revolving Credit Loan being repurchased; less amounts received in respect of interest on such repurchased Revolving Credit Loan which are being held in the Custodial Account on the date of repurchase, if any.
4. Article III of the Agreement is hereby amended effective as of the date hereof by revising Section 3.01(n) as follows (new text underlined):
(n) Company has delivered to the Purchaser financial statements of its parent, for its last two complete fiscal years. All such financial information fairly presents the pertinent results of operations and financial position for the period identified and has been prepared in accordance with GAAP consistently applied throughout the periods involved, except as set forth in the notes thereto. There has been no change in the servicing policies and procedures, business, operations, financial condition, properties or assets of the Company since the date of the Company’s financial information that would have a material adverse effect on its ability to perform its obligations under this Agreement;
5. Article III of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 3.01(r):
(r) As of the date of each Pass-Through Transfer, and except as has been otherwise disclosed to the Purchaser, any Master Servicer and any Depositor: (1) the Company is not aware and has not received notice that any default or servicing related performance trigger has occurred as to any other securitization due to any act or failure to act of the Company; (2) no material noncompliance with applicable servicing criteria as to any other securitization has been disclosed or reported by the Company; (3) the Company has not been terminated as servicer in a residential Revolving Credit Loan securitization, either due to a servicing default or to application of a servicing performance test or trigger; (4) no material changes to the Company’s servicing policies and procedures for similar loans has occurred in the preceding three years; (5) there are no aspects of the Company’s financial condition that could have a material adverse impact on the performance by the Company of its obligations hereunder; (6) there are no legal proceedings pending, or known to be contemplated by governmental authorities, against the Company that could be material to investors in the securities issued in such Pass-Through Transfer; and (7) there are no affiliations, relationships or transactions relating to the Company of a type that are described under Item 1119 of Regulation AB.
6. Article III of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 3.01(s):
(s) If so requested by the Purchaser or any Depositor on any date, the Company shall, within five Business Days following such request, confirm in writing the accuracy of the representations and warranties set forth in Section 3.01(r) of this Section or, if any such representation and warranty is not accurate as of the date of such request, provide reasonably adequate disclosure of the pertinent facts, in writing, to the requesting party.
7. Article III of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 3.01(t):
(t) Notwithstanding anything to the contrary in the Agreement, the Company shall (or shall cause each Subservicer and Third-Party Originator to) (i) immediately notify the Purchaser, any Master Servicer and any Depositor in writing of (A) any litigation or governmental proceedings pending against the Company, any Subservicer or any Third-Party Originator that could be material to investors in the securities issued in a Pass-Through Transfer, (B) any affiliations or relationships that develop following the closing date of a Pass-Through Transfer between the Company, any Subservicer or any Third-Party Originator and any of the parties specified in clause (7) of paragraph (r) of this Section (and any other parties identified in writing by the requesting party) with respect to such Pass-Through Transfer, (C) any Event of Default under the terms of this Agreement or any applicable Reconstitution Agreement related thereto, (D) any merger, consolidation or sale of substantially all of the assets of the Company, and (E) the Company’s entry into an agreement with a Subservicer to perform or assist in the performance of any of the Company’s obligations under this Agreement or any Reconstitution Agreement and (ii) provide to the Purchaser and any Depositor a description of such proceedings, affiliations or relationships.
All notifications pursuant to this Section 3.01(t), other than those pursuant to Section 3.01(t)(i)(A), should be sent to:
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751
With a copy to:
Bear, Stearns & Co. Inc.
383 Madison Avenue, 3rd Floor
New, York, NY 10179
Attention: Global Credit Administration
Facsimile: (212) 272-6564
Notifications pursuant to Section 3.01(t)(i)(A) should be sent to:
EMC Mortgage Corporation
Two Mac Arthur Ridge
909 Hidden Ridge Drive, Suite 200
Irving, TX 75038
Attention: Associate General Counsel for Loan Administration
Facsimile: (972) 831-2555
With copies to:
Bear, Stearns & Co. Inc.
383 Madison Avenue, 3rd Floor
New, York, NY 10179
Attention: Global Credit Administration
Facsimile: (212) 272-6564
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751
8. Article III of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 3.01(u):
(u) As a condition to the succession to the Company or any Subservicer as servicer or subservicer under this Agreement or any applicable Reconstitution Agreement related thereto by any Person (i) into which the Company or such Subservicer may be merged or consolidated, or (ii) which may be appointed as a successor to the Company or any Subservicer, the Company shall provide to the Purchaser, any Master Servicer and any Depositor, at least 15 calendar days prior to the effective date of such succession or appointment, (x) written notice to the Purchaser, any Master Servicer and any Depositor of such succession or appointment and (y) in writing and in form and substance reasonably satisfactory to the Purchaser, any Master Servicer and such Depositor, all information reasonably requested by the Purchaser, any Master Servicer or any Depositor in order to comply with its reporting obligation under Item 6.02 of Form 8-K with respect to any class of asset-backed securities.
9. Article III of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 3.02(jjj):
(jjj) No Revolving Credit Loan is secured by Mortgaged Property in the Commonwealth of Massachusetts with a loan application date on or after November 7, 2004 that refinances a Revolving Credit Loan that is less than sixty (60) months old, unless such Revolving Credit Loan (i) is on an investment property, (ii) meets the requirements set forth in the Code of Massachusetts Regulation (“CMR”), 209 CMR 53.04(1)(b), or (iii) meets the requirements set forth in the 209 CMR 53.04(1)(c);
10. Article IV of the Agreement is hereby amended effective as of the date hereof by adding this paragraph after the first sentence of Section 4.01:
In addition, the Company shall furnish information regarding the borrower credit files related to such Revolving Credit Loan to credit reporting agencies in compliance with the provisions of the Fair Credit Reporting Act and the applicable implementing regulations.
11. Article IV of the Agreement is hereby amended effective as of the date hereof by deleting in its entirety the last paragraph of Section 4.02 and replacing it with the following:
The Company shall not waive any Prepayment Charge unless: (i) the enforceability thereof shall have been limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally, (ii) the enforcement thereof is illegal, or any local, state or federal agency has threatened legal action if the prepayment penalty is enforced, (iii) the mortgage debt has been accelerated in connection with a foreclosure or other involuntary payment or (iv) such waiver is standard and customary in servicing similar Revolving Credit Loans and relates to a default or a reasonably foreseeable default and would, in the reasonable judgment of the Company, maximize recovery of total proceeds taking into account the value of such Prepayment Charge and the related Revolving Credit Loan. If a Prepayment Charge is waived, but does not meet the standards described above, then the Company is required to pay the amount of such waived Prepayment Charge by remitting such amount to the Purchaser by the Remittance Date.
12. Article IV of the Agreement is hereby amended effective as of the date hereof by revising the first paragraph of Section 4.03 by adding the following after the first sentence:
In determining the delinquency status of any Revolving Credit Loan, the Company will use delinquency recognition policies as described to and approved by the Purchaser, and shall revise these policies as requested by the Purchaser from time to time.
13. Article V of the Agreement is hereby amended effective as of the date hereof by deleting Section 5.02 in its entirety and replacing it with the following:
Section 5.02 Statements to the Purchaser.
The Company shall furnish to Purchaser an individual loan accounting report, as of the last Business Day of each month, in the Company's assigned loan number order to document Revolving Credit Loan payment activity on an individual Revolving Credit Loan basis. With respect to each month, the corresponding individual loan accounting report shall be received by the Purchaser no later than the fifth Business Day of the following month on a disk or tape or other computer-readable format in such format as may be mutually agreed upon by both Purchaser and Company, and no later than the fifth Business Day of the following month in hard copy, and shall contain the following:
(i) with respect to each Revolving Credit Loan and each Monthly Payment, the amount of such remittance allocable to principal (including a separate breakdown of any Principal Prepayment, including the date of such prepayment, and any prepayment penalties or premiums, along with a detailed report of interest on principal prepayment amounts remitted in accordance with Section 4.04);
(ii) with respect to each Revolving Credit Loan and each Monthly Payment, the amount of such remittance allocable to interest;
(iii) with respect to each Revolving Credit Loan, the amount of servicing compensation received by the Company during the prior distribution period;
(iv) the Stated Principal Balance of each Revolving Credit Loan and the aggregate Stated Principal Balance of all Revolving Credit Loans as of the first day of the distribution period and the last day of the distribution period;
(v) with respect to each Revolving Credit Loan, the current Mortgage Interest Rate;
(vi) with respect to each Revolving Credit Loan, the aggregate amount of any Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and REO Disposition Proceeds received during the prior distribution period;
(vii) with respect to each Revolving Credit Loan, the amount of any Prepayment Interest Shortfalls paid by the Company in accordance with Section 4.04(viii) during the prior distribution period;
(viii) the beginning and ending balances of the Custodial Account and Escrow Account;
(ix) the number of Revolving Credit Loans as of the first day of the distribution period and the last day of the distribution period;
(x) with respect to each Revolving Credit Loan, the Stated Principal Balance of each Revolving Credit Loan (a) delinquent as grouped in the following intervals through final liquidation of such Revolving Credit Loan: 30 to 59 days, 60 to 89 days, 90 days or more; (b) as to which foreclosure has commenced; and (c) as to which REO Property has been acquired;
(xi) with respect to each Revolving Credit Loan, the amount and severity of any realized loss following liquidation of such Revolving Credit Loan;
(xii) with respect to each Revolving Credit Loan, and in the aggregate for all Revolving Credit Loans, the amount of any Monthly Advances made by the Company during the prior distribution period;
(xiii) with respect to each Revolving Credit Loan, a description of any Servicing Advances made by the Company with respect to such Revolving Credit Loan including the amount, terms and general purpose of such Servicing Advances, and the aggregate amount of Servicing Advances for all Revolving Credit Loans during the prior distribution period;
(xiv) with respect to each Revolving Credit Loan, a description of any Nonrecoverable Advances made by the Company with respect to such Revolving Credit Loan including the amount, terms and general purpose of such Nonrecoverable Advances, and the aggregate amount of Nonrecoverable Advances for all Revolving Credit Loans during the prior distribution period;
(xv) with respect to each Revolving Credit Loan, a description of any Monthly Advances, Servicing Advances and Nonrecoverable Advances reimbursed to the Company with respect to such Revolving Credit Loan during the prior distribution period pursuant to Section 4.05, and the source of funds for such reimbursement, and the aggregate amount of any Monthly Advances, Servicing Advances and Nonrecoverable Advances reimbursed to the Company for all Revolving Credit Loans during the prior distribution period pursuant to Section 4.05;
(xvi) with respect to any Revolving Credit Loan, a description of any material modifications, extensions or waivers to the terms, fees, penalties or payments of such Revolving Credit Loan during the prior distribution period or that have cumulatively become material over time;
(xvii) a description of any material breach of a representation or warranty set forth in Section 3.01 or Section 3.02 herein or of any other breach of a covenant or condition contained herein and the status of any resolution of such breach;
(xviii) with respect to each Revolving Credit Loan, the Stated Principal Balance of any substitute Revolving Credit Loan provided by the Company and the Stated Principal Balance of any Revolving Credit Loan that has been replaced by a substitute Revolving Credit Loan in accordance with Section 3.03 herein;
(xix) with respect to each Revolving Credit Loan, the Stated Principal Balance of any Revolving Credit Loan that has been repurchased by the Company in accordance with Section 3.03 herein.
In addition, the Company shall provide to the Purchaser such other information known or available to the Company that is necessary in order to provide the distribution and pool performance information as required under Item 1121 of Regulation AB, as amended from time to time, as determined by the Purchaser in its sole discretion. The Company shall also provide a monthly report, in the form of Exhibit L hereto, or such other form as is mutually acceptable to the Company, the Purchaser and any Master Servicer, Exhibit M with respect to defaulted Revolving Credit Loans and Exhibit S, with respect to realized losses and gains, with each such report.
The Company shall prepare and file any and all information statements or other filings required to be delivered to any governmental taxing authority or to Purchaser pursuant to any applicable law with respect to the Revolving Credit Loans and the transactions contemplated hereby. In addition, the Company shall provide Purchaser with such information concerning the Revolving Credit Loans as is necessary for Purchaser to prepare its federal income tax return as Purchaser may reasonably request from time to time.
In addition, not more than sixty (60) days after the end of each calendar year, the Company shall furnish to each Person who was a Purchaser at any time during such calendar year an annual statement in accordance with the requirements of applicable federal income tax law as to the aggregate of remittances for the applicable portion of such year.
14. Article VI of the Agreement is hereby amended effective as of the date hereof by deleting Section 6.04 in its entirety and replacing it with the following:
Section 6.04 Annual Statement as to Compliance; Annual Certification.
(a) The Company will deliver to the Purchaser and any Master Servicer, not later than March 1 of each calendar year beginning in 2007, an Officers’ Certificate acceptable to the Purchaser (an “Annual Statement of Compliance”) stating, as to each signatory thereof, that (i) a review of the activities of the Company during the preceding calendar year (or applicable portion thereof) and of performance under this Agreement or other applicable servicing agreement has been made under such officers’ supervision and (ii) to the best of such officers’ knowledge, based on such review, the Company has fulfilled all of its obligations under this Agreement or other applicable servicing agreement in all material respects throughout such year (or applicable portion thereof), or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status of cure provisions thereof. Such Annual Statement of Compliance shall contain no restrictions or limitations on its use. Copies of such statement shall be provided by the Company to the Purchaser upon request and by the Purchaser to any Person identified as a prospective purchaser of the Revolving Credit Loans. In the event that the Company has delegated any servicing responsibilities with respect to the Revolving Credit Loans to a Subservicer, the Company shall deliver an officer’s certificate (an “Annual Certification”) of the Subservicer as described above as to each Subservicer as and when required with respect to the Company.
(b) With respect to any Revolving Credit Loans that are the subject of a Pass-Through Transfer, by March 1 of each calendar year beginning in 2007, an officer of the Company shall execute and deliver an Annual Certification to the Purchaser, any Master Servicer and any related Depositor for the benefit of each such entity and such entity’s affiliates and the officers, directors and agents of any such entity and such entity’s affiliates, in the form attached hereto as Exhibit O. In the event that the Company has delegated any servicing responsibilities with respect to the Revolving Credit Loans to a Subservicer, the Company shall deliver an Annual Certification of the Subservicer as described above as to each Subservicer as and when required with respect to the Company.
(c) If the Company cannot deliver the related Annual Statement of Compliance or Annual Certification by March 1^st of such year, the Purchaser, at its sole option, may permit a cure period for the Company to deliver such Annual Statement of Compliance or Annual Certification, but in no event later than March 10th of such year.
Failure of the Company to timely comply with this Section 6.04 shall be deemed an Event of Default, automatically, without notice and without any cure period, unless otherwise agreed to by the Purchaser as set forth in 6.04(c), and Purchaser may, in addition to whatever rights the Purchaser may have under Sections 3.03 and 8.01 and at law or equity or to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Company under this Agreement and in and to the Revolving Credit Loans and the proceeds thereof without compensating the Company for the same, as provided in Section 9.01. Such termination shall be considered with cause pursuant to Section 10.01 of this Agreement. This paragraph shall supercede any other provision in this Agreement or any other agreement to the contrary.
15. Article VI of the Agreement is hereby amended effective as of the date hereof by deleting Section 6.05 in its entirety and replacing it with the following:
Section 6.05 [Reserved]
16. Article VI of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 6.08:
Section 6.08 Assessment of Compliance with Servicing Criteria.
On and after January 1, 2006, the Company shall service and administer, and shall cause each subservicer to servicer or administer, the Revolving Credit Loans in accordance with all applicable requirements of the Servicing Criteria.
With respect to any Revolving Credit Loans that are the subject of a Pass-Through Transfer, the Company shall deliver to the Purchaser or its designee, any Master Servicer and any Depositor on or before March 1 of each calendar year beginning in 2007, a report (an “Assessment of Compliance”) reasonably satisfactory to the Purchaser, any Master Servicer and any Depositor regarding the Company’s assessment of compliance with the Servicing Criteria during the preceding calendar year as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB or as otherwise required by the Master Servicer, which as of the date hereof, require a report by an authorized officer of the Company that contains the following:
(a) A statement by such officer of its responsibility for assessing compliance with the Servicing Criteria applicable to the Company;
(b) A statement by such officer that such officer used the Servicing Criteria to assess compliance with the Servicing Criteria applicable to the Company;
(c) An assessment by such officer of the Company’s compliance with the applicable Servicing Criteria for the period consisting of the preceding calendar year, including disclosure of any material instance of noncompliance with respect thereto during such period, which assessment shall be based on the activities it performs with respect to asset-backed securities transactions taken as a whole involving the Company, that are backed by the same asset type as the Revolving Credit Loans;
(d) A statement that a registered public accounting firm has issued an attestation report on the Company’s Assessment of Compliance for the period consisting of the preceding calendar year; and
(e) A statement as to which of the Servicing Criteria, if any, are not applicable to the Company, which statement shall be based on the activities it performs with respect to asset-backed securities transactions taken as a whole involving the Company, that are backed by the same asset type as the Revolving Credit Loans.
Such report at a minimum shall address each of the Servicing Criteria specified on a certification substantially in the form of Exhibit R hereto delivered to the Purchaser concurrently with the execution of this Agreement.
With respect to any Revolving Credit Loans that are the subject of a Pass-Through Transfer, on or before March 1 of each calendar year beginning in 2007, the Company shall furnish to the Purchaser or its designee, any Master Servicer and any Depositor a report (an “Attestation Report”) by a registered public accounting firm that attests to, and reports on, the Assessment of Compliance made by the Company, as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB or as otherwise required by the Master Servicer, which Attestation Report must be made in accordance with standards for attestation reports issued or adopted by the Public Company Accounting Oversight Board.
The Company shall cause each Subservicer, and each Subcontractor determined by the Company pursuant to Section 12.17 to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, to deliver to the Purchaser, any Master Servicer and any Depositor an assessment of compliance and accountants’ attestation as and when provided in Sections 6.08.
If the Company cannot deliver the related Assessment of Compliance or Attestation Report by March 1^st of such year, the Purchaser, at its sole option, may permit a cure period for the Company to deliver such Assessment of Compliance or Attestation Report, but in no event later than March 10th of such year.
Failure of the Company to timely comply with this Section 6.08 shall be deemed an Event of Default, automatically, without notice and without any cure period, unless otherwise agreed to by the Purchaser as described herein, and Purchaser may, in addition to whatever rights the Purchaser may have under Sections 3.03 and 8.01 and at law or equity or to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Company under this Agreement and in and to the Revolving Credit Loans and the proceeds thereof without compensating the Company for the same, as provided in Section 9.01. Such termination shall be considered with cause pursuant to Section 10.01 of this Agreement. This paragraph shall supercede any other provision in this Agreement or any other agreement to the contrary.
17. Article VI of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 6.09:
Section 6.09 Intent of the Parties; Reasonableness.
The Purchaser and the Company acknowledge and agree that a purpose of Sections 3.01(r), 5.02, 6.04, 6.08 and 11.01 of this Agreement is to facilitate compliance by the Purchaser and any Depositor with the provisions of Regulation AB and related rules and regulations of the Commission. None of the Purchaser, any master Servicer or any Depositor shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder. The Company acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with requests made by the Purchaser or any Depositor in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB. In connection with any Pass-Through Transfer, the Company shall cooperate fully with the Purchaser to deliver to the Purchaser (including any of its assignees or designees) and any Depositor, any and all statements, reports, certifications, records and any other information necessary in the good faith determination of the Purchaser or any Depositor to permit the Purchaser or such Depositor to comply with the provisions of Regulation AB, together with such disclosures relating to the Company, any Subservicer, any Third-Party Originator and the Revolving Credit Loans, or the servicing of the Revolving Credit Loans, reasonably believed by the Purchaser or any Depositor to be necessary in order to effect such compliance.
18. Article IX of the Agreement is hereby amended effective as of the date hereof by deleting the first sentence of the last paragraph of Section 9.01 and replacing it with the following (new text underlined):
Then, and in each and every such case, so long as an Event of Default shall not have been remedied, the Purchaser, by notice in writing to the Company (except in the case of an Event of Default under clauses (iii), (iv) or (v) above, or as otherwise stated herein, in which case, automatically and without notice) may, in addition to whatever rights the Purchaser may have under Sections 3.03 and 8.01 and at law or equity or to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Company (and if the Company is servicing any of the Revolving Credit Loans in a Securitization Transaction, appoint a successor servicer reasonably acceptable to any Master Servicer for such Securitization Transaction) under this Agreement and in and to the Revolving Credit Loans and the proceeds thereof without compensating the Company for the same.
19. Article IX of the Agreement is hereby amended effective as of the date hereof by adding the following at the end of the last paragraph of Section 9.01:
The Company shall promptly reimburse the Purchaser (or any designee of the Purchaser, such as a master servicer) and any Depositor, as applicable, for all reasonable expenses incurred by the Purchaser (or such designee) or such Depositor, as such are incurred, in connection with the termination of the Company as servicer pursuant to this Section and the resulting transfer of servicing of the Revolving Credit Loans to a successor servicer. The provisions of this paragraph shall not limit whatever rights the Purchaser or any Depositor may have under other provisions of this Agreement and/or any applicable Reconstitution Agreement related thereto or otherwise, whether in equity or at law, such as an action for damages, specific performance or injunctive relief.
20. Article XI of the Agreement is hereby amended effective as of the date hereof by restating Section 11.01 in its entirety as follows:
Section 11.01. Cooperation of Company with a Reconstitution.
The Company and the Purchaser agree that with respect to some or all of the Revolving Credit Loans, on or after the related Closing Date, on one or more dates (each a "Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect a sale (each, a "Reconstitution") of some or all of the Revolving Credit Loans then subject to this Agreement, without recourse, to:
(a) one or more third party purchasers in one or more in whole loan transfers (each, a "Whole Loan Transfer"); or
(b) one or more trusts or other entities to be formed as part of one or more Pass-Through Transfers.
The Company agrees to execute in connection with any agreements among the Purchaser, the Company, and any servicer in connection with a Whole Loan Transfer, an Assignment, Assumption and Recognition Agreement substantially in the form of Exhibit D hereto, or, at Purchaser’s request, a seller's warranties and servicing agreement or a participation and servicing agreement or similar agreement in form and substance reasonably acceptable to the parties, and in connection with a Pass-Through Transfer, a pooling and servicing agreement in form and substance reasonably acceptable to the parties, (collectively the agreements referred to herein are designated, the “Reconstitution Agreements”). It is understood that any such Reconstitution Agreements will not contain any greater obligations on the part of Company than are contained in this Agreement. Notwithstanding anything to the contrary in this Section 11.01, the Company agrees that it is required to perform the obligations described in Exhibit N hereto.
With respect to each Whole Loan Transfer and each Pass-Through Transfer entered into by the Purchaser, the Company agrees (1) to cooperate fully with the Purchaser and any prospective purchaser with respect to all reasonable requests and due diligence procedures; (2) to execute, deliver and perform all Reconstitution Agreements required by the Purchaser; (3) to restate the representations and warranties set forth in this Agreement as of the settlement or closing date in connection with such Reconstitution (each, a "Reconstitution Date").
In addition, the Company shall provide to such servicer or issuer, as the case may be, and any other participants in such Reconstitution:
(i) any and all information and appropriate verification of information which may be reasonably available to the Company, whether through letters of its auditors and counsel or otherwise, as the Purchaser or any such other participant shall request upon reasonable demand;
(ii) such additional representations, warranties, covenants, opinions of counsel, letters from auditors, and certificates of public officials or officers of the Company as are reasonably agreed upon by the Company and the Purchaser or any such other participant;
(iii) within 5 Business Days after request by the Purchaser, the information with respect to the Company (as originator) and each Third-Party Originator of the Revolving Credit Loans as required under Item 1110(a) and (b) of Regulation AB, a summary of the requirements of which has of the date hereof is attached hereto as Exhibit Q for convenience of reference only, as determined by Purchaser in its sole discretion. If requested by the Purchaser, this will include information about the applicable credit-granting or underwriting criteria;
(iv) within 5 Business Days after request by the Purchaser, the Company shall provide (or, as applicable, cause each Third-Party Originator to provide) to the extent reasonably available to the Company Static Pool Information with respect to the Revolving Credit Loans (of a similar type as the Revolving Credit Loans, as reasonably identified by the Purchaser as provided below) serviced by or for the Company or any Third-Party Originator and originated by (i) the Company, if the Company is an originator of Revolving Credit Loans (including as an acquirer of Revolving Credit Loans from a Qualified Correspondent), and/or (ii) each Third-Party Originator. Such Static Pool Information shall be prepared by the Company (or Third-Party Originator) on the basis of its reasonable, good faith interpretation of the requirements of Item 1105(a)(1)-(3) and (c) of Regulation AB for the period of time such Revolving Credit Loans were serviced by or for the Company (or Third-Party Originator). To the extent that there is reasonably available to the Company (or Third-Party Originator) Static Pool Information with respect to more than one Revolving Credit Loan type, the Purchaser or any Depositor shall be entitled to specify whether some or all of such information shall be provided pursuant to this paragraph. The content of such Static Pool Information may be in the form customarily provided by the Company, and need not be customized for the Purchaser or any Depositor. Such Static Pool Information for each vintage origination year or prior securitized pool, as applicable, shall be presented in increments no less frequently than quarterly over the life of the Revolving Credit Loans included in the vintage origination year or prior securitized pool. The most recent periodic increment must be as of a date no later than 135 days prior to the date of the prospectus or other offering document in which the Static Pool Information is to be included or incorporated by reference. The Static Pool Information shall be provided in an electronic format that provides a permanent record of the information provided, such as a portable document format (pdf) file, or other such electronic format reasonably required by the Purchaser or the Depositor, as applicable;
(v) within 5 Business Days after request by the Purchaser, information with respect to the Company (as servicer) as required by Item 1108(b) and (c) of Regulation AB, a summary of the requirements of which as of the date hereof is attached hereto as Exhibit Q for convenience of reference only, as determined by Purchaser in its sole discretion. In the event that the Company has delegated any servicing responsibilities with respect to the Revolving Credit Loans to a Subservicer, the Company shall provide the information required pursuant to this clause with respect to the Subservicer;
(vi) within 5 Business Days after request by the Purchaser,
(a) information regarding any legal proceedings pending (or known to be contemplated) against the Company (as originator and as servicer) and each other originator of the Revolving Credit Loans and each Subservicer as required by Item 1117 of Regulation AB, a summary of the requirements of which as of the date hereof is attached hereto as Exhibit Q for convenience of reference only, as determined by Purchaser in its sole discretion,
(b) information regarding affiliations with respect to the Company (as originator and as servicer) and each other originator of the Revolving Credit Loans and each Subservicer as required by Item 1119(a) of Regulation AB, a summary of the requirements of which as of the date hereof is attached hereto as Exhibit Q for convenience of reference only, as determined by Purchaser in its sole discretion, and
(c) information regarding relationships and transactions with respect to the Company (as originator and as servicer) and each other originator of the Revolving Credit Loans and each Subservicer as required by Item 1119(b) and (c) of Regulation AB, a summary of the requirements of which as of the date hereof is attached hereto as Exhibit Q for convenience of reference only, as determined by Purchaser in its sole discretion;
(vii) if so requested by the Purchaser, the Company shall provide (or, as applicable, cause each Third-Party Originator to provide), at the expense of the requesting party (to the extent of any additional incremental expense associated with delivery pursuant to this Agreement), such statements and agreed-upon procedures letters of certified public accountants reasonably acceptable to the Purchaser or Depositor, as applicable, pertaining to Static Pool Information relating to prior securitized pools for securitizations closed on or after January 1, 2006 or, in the case of Static Pool Information with respect to the Company’s or Third-Party Originator’s originations or purchases, to calendar months commencing January 1, 2006, or to any financial information included in any other disclosure provided under this Section 11.01, as the Purchaser or such Depositor shall reasonably request. Such statements and letters shall be addressed to and be for the benefit of such parties as the Purchaser or such Depositor shall designate, which may include, by way of example, any Sponsor, any Depositor and any broker dealer acting as underwriter, placement agent or initial purchaser with respect to a Pass-Through Transfer. Any such statement or letter may take the form of a standard, generally applicable document accompanied by a reliance letter authorizing reliance by the addressees designated by the Purchaser or such Depositor;
(viii) For the purpose of satisfying the reporting obligation under the Exchange Act with respect to any class of asset-backed securities, the Company shall (or shall cause each Subservicer and Third-Party Originator to) (i) provide prompt notice to the Purchaser, any Master Servicer and any Depositor in writing of (A) any litigation or governmental proceedings involving the Company, any Subservicer or any Third-Party Originator that could be material to investors in the securities issued in a Pass-Through Transfer, (B) any affiliations or relationships that develop following the closing date of a Securitization Transaction between the Company, any Subservicer or any Third-Party Originator and any of the parties specified in clause (D) of paragraph (a) of this Section (and any other parties identified in writing by the requesting party) with respect to such Securitization Transaction, (C) any Event of Default under the terms of this Agreement or any applicable Reconstitution Agreement related thereto, (D) any merger, consolidation or sale of substantially all of the assets of the Company, and (E) the Company’s entry into an agreement with a Subservicer to perform or assist in the performance of any of the Company’s obligations under this Agreement or any applicable Reconstitution Agreement related thereto and (ii) provide to the Purchaser and any Depositor a description of such proceedings, affiliations or relationships;
(ix) As a condition to the succession to the Company or any Subservicer as servicer or subservicer under this Agreement or any applicable Reconstitution Agreement related thereto by any Person (i) into which the Company or such Subservicer may be merged or consolidated, or (ii) which may be appointed as a successor to the Company or any Subservicer, the Company shall provide to the Purchaser, any Master Servicer, and any Depositor, at least 15 calendar days prior to the effective date of such succession or appointment, (x) written notice to the Purchaser and any Depositor of such succession or appointment and (y) in writing and in form and substance reasonably satisfactory to the Purchaser and such Depositor, all information reasonably requested by the Purchaser or any Depositor in order to comply with its reporting obligation under Item 6.02 of Form 8-K with respect to any class of asset-backed securities;
(x) In addition to such information as the Company, as servicer, is obligated to provide pursuant to other provisions of this Agreement, not later than ten days prior to the deadline for the filing of any distribution report on Form 10-D in respect of any Securitization Transaction that includes any of the Revolving Credit Loans serviced by the Company or any Subservicer, the Company or such Subservicer, as applicable, shall, to the extent the Company or such Subservicer has knowledge, provide to the party responsible for filing such report (including, if applicable, the Master Servicer) notice of the occurrence of any of the following events along with all information, data, and materials related thereto as may be required to be included in the related distribution report on Form 10-D (as specified in the provisions of Regulation AB referenced below):
(B) material breaches of pool asset representations or warranties or transaction covenants (Item 1121(a)(12) of Regulation AB); and
(xi) The Company shall provide to the Purchaser, any Master Servicer and any Depositor, evidence of the authorization of the person signing any certification or statement, copies or other evidence of Fidelity Bond Insurance and Errors and Omission Insurance policy, financial information and reports, and such other information related to the Company or any Subservicer or the Company or such Subservicer’s performance hereunder.
In the event of a conflict or inconsistency between the terms of Exhibit Q and the text of the applicable Item of Regulation AB as cited above, the text of Regulation AB, its adopting release and other public statements of the SEC shall control.
The Company shall indemnify the Purchaser, each affiliate of the Purchaser, and each of the following parties participating in a Pass-Through Transfer: each sponsor and issuing entity; each Person (including, but not limited to, any Master Servicer, if applicable) responsible for the preparation, execution or filing of any report required to be filed with the Commission with respect to such Pass-Through Transfer, or for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such Pass-Through Transfer; each broker dealer acting as underwriter, placement agent or initial purchaser, each Person who controls any of such parties or the Depositor (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act); and the respective present and former directors, officers, employees, agents and affiliates of each of the foregoing and of the Depositor (each, an “Indemnified Party”), and shall hold each of them harmless from and against any claims, losses, damages, penalties, fines, forfeitures, legal fees and expenses and related costs, judgments, and any other costs, fees and expenses that any of them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or alleged to be contained in any written information, written report, certification, data, accountants’ letter or other material provided under this Section 11.01 by or on behalf of the Company, or provided under this Section 11.01 by or on behalf of any Subservicer, Subcontractor or Third-Party Originator (collectively, the “Company Information”), or (B) the omission or alleged omission to state in the Company Information a material fact required to be stated in the Company Information or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, by way of clarification, that clause (B) of this paragraph shall be construed solely by reference to the Company Information and not to any other information communicated in connection with a sale or purchase of securities, without regard to whether the Company Information or any portion thereof is presented together with or separately from such other information;
(ii) any breach by the Company of its obligations under this Section 11.01, including particularly any failure by the Company, any Subservicer, any Subcontractor or any Third-Party Originator to deliver any information, report, certification, accountants’ letter or other material when and as required under this Section 11.01, including any failure by the Company to identify pursuant to Section 12.17 any Subcontractor “participating in the servicing function” within the meaning of Item 1122 of Regulation AB;
(iii) any breach by the Company of a representation or warranty set forth in Section 3.01 or in a writing furnished pursuant to Section 3.01(s) and made as of a date prior to the closing date of the related Pass-Through Transfer, to the extent that such breach is not cured by such closing date, or any breach by the Company of a representation or warranty in a writing furnished pursuant to Section 3.01(s) to the extent made as of a date subsequent to such closing date; or
(iv) the negligence bad faith or willful misconduct of the Company in connection with its performance under this Section 11.01.
If the indemnification provided for herein is unavailable or insufficient to hold harmless an Indemnified Party, then the Company agrees that it shall contribute to the amount paid or payable by such Indemnified Party as a result of any claims, losses, damages or liabilities incurred by such Indemnified Party in such proportion as is appropriate to reflect the relative fault of such Indemnified Party on the one hand and the Company on the other.
In the case of any failure of performance described above, the Company shall promptly reimburse the Purchaser, any Depositor, as applicable, and each Person responsible for the preparation, execution or filing of any report required to be filed with the Commission with respect to such Securitization Transaction, or for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such Securitization Transaction, for all costs reasonably incurred by each such party in order to obtain the information, report, certification, accountants’ letter or other material not delivered as required by the Company, any Subservicer, any Subcontractor or any Third-Party Originator.
This indemnification shall survive the termination of this Agreement or the termination of any party to this Agreement.
21. Article XI of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 12.17:
Section 12.17. Use of Subservicers and Subcontractors.
(a) The Company shall not hire or otherwise utilize the services of any Subservicer to fulfill any of the obligations of the Company as servicer under this Agreement or any applicable Reconstitution Agreement related thereto unless the Company complies with the provisions of paragraph (b) of this Section. The Company shall not hire or otherwise utilize the services of any Subcontractor, and shall not permit any Subservicer to hire or otherwise utilize the services of any Subcontractor, to fulfill any of the obligations of the Company as servicer under this Agreement or any applicable Reconstitution Agreement related thereto unless the Company complies with the provisions of paragraph (d) of this Section.
(b) It shall not be necessary for the Company to seek the consent of the Purchaser, any Master Servicer or any Depositor to the utilization of any Subservicer. The Company shall cause any Subservicer used by the Company (or by any Subservicer) for the benefit of the Purchaser and any Depositor to comply with the provisions of this Section and with Sections 3.01(r), 3.01(u), 6.04, 6.08 and 11.01 of this Agreement to the same extent as if such Subservicer were the Company, and to provide the information required with respect to such Subservicer under Section 3.01(t) of this Agreement. The Company shall be responsible for obtaining from each Subservicer and delivering to the Purchaser, any Master Servicer and any Depositor any Annual Statement of Compliance required to be delivered by such Subservicer under Section 6.04(a), any Assessment of Compliance and Attestation Report required to be delivered by such Subservicer under Section 6.08 and any Annual Certification required under Section 6.04(b) as and when required to be delivered.
(c) It shall not be necessary for the Company to seek the consent of the Purchaser, any Master Servicer or any Depositor to the utilization of any Subcontractor. The Company shall promptly upon request provide to the Purchaser, any Master Servicer and any Depositor (or any designee of the Depositor, such as an administrator) a written description (in form and substance satisfactory to the Purchaser, any Master Servicer and such Depositor) of the role and function of each Subcontractor utilized by the Company or any Subservicer, specifying (i) the identity of each such Subcontractor, (ii) which (if any) of such Subcontractors are “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, and (iii) which elements of the Servicing Criteria will be addressed in assessments of compliance provided by each Subcontractor identified pursuant to clause (ii) of this paragraph.
(d) As a condition to the utilization of any Subcontractor determined to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, the Company shall cause any such Subcontractor used by the Company (or by any Subservicer) for the benefit of the Purchaser and any Depositor to comply with the provisions of Sections 6.08 and 11.01 of this Agreement to the same extent as if such Subcontractor were the Company. The Company shall be responsible for obtaining from each Subcontractor and delivering to the Purchaser and any Depositor any Assessment of Compliance and Attestation Report and the other certificates required to be delivered by such Subservicer and such Subcontractor under Section 6.08, in each case as and when required to be delivered.
22. Article XI of the Agreement is hereby amended effective as of the date hereof by adding the following new Section 12.18:
Section 12.18. Third Party Beneficiary.
For purposes of this Agreement, each Master Servicer shall be considered a third party beneficiary to this Agreement, entitled to all the rights and benefits hereof as if it were a direct party to this Agreement.
23. Notwithstanding anything contrary contained in the Agreement, it is specifically agreed by the parties agree that the Company may sell Revolving Credit Loans to the Purchaser, from time to time, on a servicing retained basis. Such Revolving Credit Loans shall be sold pursuant to a Term Sheet and the Agreement (and this Amendment), and all terms and conditions of the Agreement (and this Amendment) shall apply to each purchase. Further, any reference in the Agreement to “Purchase Price and Terms Letter” shall be deleted in its entirety and replaced with “Term Sheet or Confirmation”.
24. The Agreement is hereby amended as of the date hereof by adding this new Exhibit L:
EXHIBIT L
REPORTING DATA FOR MONTHLY REPORT
Standard File Layout - Master Servicing

Column Name	Description	Decimal	Format Comment	Max Size

SER_INVESTOR_NBR	A value assigned by the Servicer to define a group of loans.		Text up to 10 digits	20

LOAN_NBR	A unique identifier assigned to each loan by the investor.		Text up to 10 digits	10

SERVICER_LOAN_NBR	A unique number assigned to a loan by the Servicer. This may be different than the LOAN_NBR.		Text up to 10 digits	10

BORROWER_NAME	The borrower name as received in the file. It is not separated by first and last name.		Maximum length of 30 (Last, First)	30

SCHED_PAY_AMT	Scheduled monthly principal and scheduled interest payment that a borrower is expected to pay, P&I constant.	2	No commas(,) or dollar signs ($)	11

NOTE_INT_RATE	The loan interest rate as reported by the Servicer.	4	Max length of 6	6

NET_INT_RATE	The loan gross interest rate less the service fee rate as reported by the Servicer.	4	Max length of 6	6

SERV_FEE_RATE	The servicer's fee rate for a loan as reported by the Servicer.	4	Max length of 6	6

SERV_FEE_AMT	The servicer's fee amount for a loan as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11

NEW_PAY_AMT	The new loan payment amount as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11

NEW_LOAN_RATE	The new loan rate as reported by the Servicer.	4	Max length of 6	6

ARM_INDEX_RATE	The index the Servicer is using to calculate a forecasted rate.	4	Max length of 6	6

ACTL_BEG_PRIN_BAL	The borrower's actual principal balance at the beginning of the processing cycle.	2	No commas(,) or dollar signs ($)	11

ACTL_END_PRIN_BAL	The borrower's actual principal balance at the end of the processing cycle.	2	No commas(,) or dollar signs ($)	11

BORR_NEXT_PAY_DUE_DATE	The date at the end of processing cycle that the borrower's next payment is due to the Servicer, as reported by Servicer.		MM/DD/YYYY	10

SERV_CURT_AMT_1	The first curtailment amount to be applied.	2	No commas(,) or dollar signs ($)	11

SERV_CURT_DATE_1	The curtailment date associated with the first curtailment amount.		MM/DD/YYYY	10

CURT_ADJ_ AMT_1	The curtailment interest on the first curtailment amount, if applicable.	2	No commas(,) or dollar signs ($)	11

SERV_CURT_AMT_2	The second curtailment amount to be applied.	2	No commas(,) or dollar signs ($)	11

SERV_CURT_DATE_2	The curtailment date associated with the second curtailment amount.		MM/DD/YYYY	10

CURT_ADJ_ AMT_2	The curtailment interest on the second curtailment amount, if applicable.	2	No commas(,) or dollar signs ($)	11

SERV_CURT_AMT_3	The third curtailment amount to be applied.	2	No commas(,) or dollar signs ($)	11

SERV_CURT_DATE_3	The curtailment date associated with the third curtailment amount.		MM/DD/YYYY	10

CURT_ADJ_AMT_3	The curtailment interest on the third curtailment amount, if applicable.	2	No commas(,) or dollar signs ($)	11

PIF_AMT	The loan "paid in full" amount as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11

PIF_DATE	The paid in full date as reported by the Servicer.		MM/DD/YYYY	10

ACTION_CODE	The standard FNMA numeric code used to indicate the default/delinquent status of a particular loan.		Action Code Key: 15=Bankruptcy, 30=Foreclosure, , 60=PIF, 63=Substitution, 65=Repurchase,70=REO	2

INT_ADJ_AMT	The amount of the interest adjustment as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11

SOLDIER_SAILOR_ADJ_AMT	The Soldier and Sailor Adjustment amount, if applicable.	2	No commas(,) or dollar signs ($)	11

NON_ADV_LOAN_AMT	The Non Recoverable Loan Amount, if applicable.	2	No commas(,) or dollar signs ($)	11

LOAN_LOSS_AMT	The amount the Servicer is passing as a loss, if applicable.	2	No commas(,) or dollar signs ($)	11

SCHED_BEG_PRIN_BAL	The scheduled outstanding principal amount due at the beginning of the cycle date to be passed through to investors.	2	No commas(,) or dollar signs ($)	11

SCHED_END_PRIN_BAL	The scheduled principal balance due to investors at the end of a processing cycle.	2	No commas(,) or dollar signs ($)	11

SCHED_PRIN_AMT	The scheduled principal amount as reported by the Servicer for the current cycle -- only applicable for Scheduled/Scheduled Loans.	2	No commas(,) or dollar signs ($)	11

SCHED_NET_INT	The scheduled gross interest amount less the service fee amount for the current cycle as reported by the Servicer -- only applicable for Scheduled/Scheduled Loans.	2	No commas(,) or dollar signs ($)	11

ACTL_PRIN_AMT	The actual principal amount collected by the Servicer for the current reporting cycle -- only applicable for Actual/Actual Loans.	2	No commas(,) or dollar signs ($)	11

ACTL_NET_INT	The actual gross interest amount less the service fee amount for the current reporting cycle as reported by the Servicer -- only applicable for Actual/Actual Loans.	2	No commas(,) or dollar signs ($)	11

PREPAY_PENALTY_ AMT	The penalty amount received when a borrower prepays on his loan as reported by the Servicer.	2	No commas(,) or dollar signs ($)	11

PREPAY_PENALTY_ WAIVED	The prepayment penalty amount for the loan waived by the servicer.	2	No commas(,) or dollar signs ($)	11

MOD_DATE	The Effective Payment Date of the Modification for the loan.		MM/DD/YYYY	10

MOD_TYPE	The Modification Type.		Varchar - value can be alpha or numeric	30

DELINQ_P&I_ADVANCE_AMT	The current outstanding principal and interest advances made by Servicer.	2	No commas(,) or dollar signs ($)	11
25. The Agreement is hereby amended as of the date hereof by adding the following new Exhibit M:
EXHIBIT M
REPORTING DATA FOR DEFAULTED LOANS
Standard File Layout - Delinquency Reporting
Column/Header Name	Description	Decimal	Format Comment
SERVICER_LOAN_NBR	A unique number assigned to a loan by the Servicer. This may be different than the LOAN_NBR
LOAN_NBR	A unique identifier assigned to each loan by the originator.
CLIENT_NBR	Servicer Client Number
SERV_INVESTOR_NBR	Contains a unique number as assigned by an external servicer to identify a group of loans in their system.
BORROWER_FIRST_NAME	First Name of the Borrower.
BORROWER_LAST_NAME	Last name of the borrower.
PROP_ADDRESS	Street Name and Number of Property
PROP_STATE	The state where the property located.
PROP_ZIP	Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE	The date that the borrower's next payment is due to the servicer at the end of processing cycle, as reported by Servicer.		MM/DD/YYYY
LOAN_TYPE	Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE	The date a particular bankruptcy claim was filed.		MM/DD/YYYY
BANKRUPTCY_CHAPTER_CODE	The chapter under which the bankruptcy was filed.
BANKRUPTCY_CASE_NBR	The case number assigned by the court to the bankruptcy filing.
POST_PETITION_DUE_DATE	The payment due date once the bankruptcy has been approved by the courts		MM/DD/YYYY
BANKRUPTCY_DCHRG_DISM_DATE	The Date The Loan Is Removed From Bankruptcy. Either by Dismissal, Discharged and/or a Motion For Relief Was Granted.		MM/DD/YYYY
LOSS_MIT_APPR_DATE	The Date The Loss Mitigation Was Approved By The Servicer		MM/DD/YYYY
LOSS_MIT_TYPE	The Type Of Loss Mitigation Approved For A Loan Such As;
LOSS_MIT_EST_COMP_DATE	The Date The Loss Mitigation /Plan Is Scheduled To End/Close		MM/DD/YYYY
LOSS_MIT_ACT_COMP_DATE	The Date The Loss Mitigation Is Actually Completed		MM/DD/YYYY
FRCLSR_APPROVED_DATE	The date DA Admin sends a letter to the servicer with instructions to begin foreclosure proceedings.		MM/DD/YYYY
ATTORNEY_REFERRAL_DATE	Date File Was Referred To Attorney to Pursue Foreclosure		MM/DD/YYYY
FIRST_LEGAL_DATE	Notice of 1st legal filed by an Attorney in a Foreclosure Action		MM/DD/YYYY
FRCLSR_SALE_EXPECTED_DATE	The date by which a foreclosure sale is expected to occur.		MM/DD/YYYY
FRCLSR_SALE_DATE	The actual date of the foreclosure sale.		MM/DD/YYYY
FRCLSR_SALE_AMT	The amount a property sold for at the foreclosure sale.	2	No commas(,) or dollar signs ($)
EVICTION_START_DATE	The date the servicer initiates eviction of the borrower.		MM/DD/YYYY
EVICTION_COMPLETED_DATE	The date the court revokes legal possession of the property from the borrower.		MM/DD/YYYY
LIST_PRICE	The price at which an REO property is marketed.	2	No commas(,) or dollar signs ($)
LIST_DATE	The date an REO property is listed at a particular price.		MM/DD/YYYY
OFFER_AMT	The dollar value of an offer for an REO property.	2	No commas(,) or dollar signs ($)
OFFER_DATE_TIME	The date an offer is received by DA Admin or by the Servicer.		MM/DD/YYYY
REO_CLOSING_DATE	The date the REO sale of the property is scheduled to close.		MM/DD/YYYY
REO_ACTUAL_CLOSING_DATE	Actual Date Of REO Sale		MM/DD/YYYY
OCCUPANT_CODE	Classification of how the property is occupied.
PROP_CONDITION_CODE	A code that indicates the condition of the property.
PROP_INSPECTION_DATE	The date a property inspection is performed.		MM/DD/YYYY
APPRAISAL_DATE	The date the appraisal was done.		MM/DD/YYYY
CURR_PROP_VAL	The current "as is" value of the property based on brokers price opinion or appraisal.	2
REPAIRED_PROP_VAL	The amount the property would be worth if repairs are completed pursuant to a broker's price opinion or appraisal.	2
If applicable:
DELINQ_STATUS_CODE	FNMA Code Describing Status of Loan
DELINQ_REASON_CODE	The circumstances which caused a borrower to stop paying on a loan. Code indicates the reason why the loan is in default for this cycle.
MI_CLAIM_FILED_DATE	Date Mortgage Insurance Claim Was Filed With Mortgage Insurance Company.		MM/DD/YYYY
MI_CLAIM_AMT	Amount of Mortgage Insurance Claim Filed		No commas(,) or dollar signs ($)
MI_CLAIM_PAID_DATE	Date Mortgage Insurance Company Disbursed Claim Payment		MM/DD/YYYY
MI_CLAIM_AMT_PAID	Amount Mortgage Insurance Company Paid On Claim	2	No commas(,) or dollar signs ($)
POOL_CLAIM_FILED_DATE	Date Claim Was Filed With Pool Insurance Company		MM/DD/YYYY
POOL_CLAIM_AMT	Amount of Claim Filed With Pool Insurance Company	2	No commas(,) or dollar signs ($)
POOL_CLAIM_PAID_DATE	Date Claim Was Settled and The Check Was Issued By The Pool Insurer		MM/DD/YYYY
POOL_CLAIM_AMT_PAID	Amount Paid On Claim By Pool Insurance Company	2	No commas(,) or dollar signs ($)
FHA_PART_A_CLAIM_FILED_DATE	Date FHA Part A Claim Was Filed With HUD		MM/DD/YYYY
FHA_PART_A_CLAIM_AMT	Amount of FHA Part A Claim Filed	2	No commas(,) or dollar signs ($)
FHA_PART_A_CLAIM_PAID_DATE	Date HUD Disbursed Part A Claim Payment		MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT	Amount HUD Paid on Part A Claim	2	No commas(,) or dollar signs ($)
FHA_PART_B_CLAIM_FILED_DATE	Date FHA Part B Claim Was Filed With HUD		MM/DD/YYYY
FHA_PART_B_CLAIM_AMT	Amount of FHA Part B Claim Filed	2	No commas(,) or dollar signs ($)
FHA_PART_B_CLAIM_PAID_DATE	Date HUD Disbursed Part B Claim Payment		MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT	Amount HUD Paid on Part B Claim	2	No commas(,) or dollar signs ($)
VA_CLAIM_FILED_DATE	Date VA Claim Was Filed With the Veterans Admin		MM/DD/YYYY
VA_CLAIM_PAID_DATE	Date Veterans Admin. Disbursed VA Claim Payment		MM/DD/YYYY
VA_CLAIM_PAID_AMT	Amount Veterans Admin. Paid on VA Claim	2	No commas(,) or dollar signs ($)
Exhibit 2: Standard File Codes - Delinquency Reporting
The Loss Mit Type field should show the approved Loss Mitigation Code as follows:
·	ASUM-Approved Assumption
·	BAP-Borrower Assistance Program
·	CO-Charge Off
·	DIL-Deed-in-Lieu
·	FFA-Formal Forbearance Agreement
·	MOD-Loan Modification
·	PRE-Pre-Sale
·	SS-Short Sale
·	MISC-Anything else approved by the PMI or Pool Insurer
The Occupant Code field should show the current status of the property code as follows:
Mortgagor
Tenant
Unknown
Vacant
The Property Condition field should show the last reported condition of the property as follows:
Damaged
Excellent
Fair
Gone
Good
Poor
·	Special Hazard
Unknown
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as follows:
Delinquency Code	Delinquency Description

001	FNMA-Death of principal mortgagor

002	FNMA-Illness of principal mortgagor

003	FNMA-Illness of mortgagor’s family member

004	FNMA-Death of mortgagor’s family member

005	FNMA-Marital difficulties

006	FNMA-Curtailment of income

007	FNMA-Excessive Obligation

008	FNMA-Abandonment of property

009	FNMA-Distant employee transfer

011	FNMA-Property problem

012	FNMA-Inability to sell property

013	FNMA-Inability to rent property

014	FNMA-Military Service

015	FNMA-Other

016	FNMA-Unemployment

017	FNMA-Business failure

019	FNMA-Casualty loss

022	FNMA-Energy environment costs

023	FNMA-Servicing problems

026	FNMA-Payment adjustment

027	FNMA-Payment dispute

029	FNMA-Transfer of ownership pending

030	FNMA-Fraud

031	FNMA-Unable to contact borrower

INC	FNMA-Incarceration
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Status Code field should show the Status of Default as follows:
Status Code	Status Description

09	Forbearance

17	Pre-foreclosure Sale Closing Plan Accepted

24	Government Seizure

26	Refinance

27	Assumption

28	Modification

29	Charge-Off

30	Third Party Sale

31	Probate

32	Military Indulgence

43	Foreclosure Started

44	Deed-in-Lieu Started

49	Assignment Completed

61	Second Lien Considerations

62	Veteran’s Affairs-No Bid

63	Veteran’s Affairs-Refund

64	Veteran’s Affairs-Buydown

65	Chapter 7 Bankruptcy

66	Chapter 11 Bankruptcy

67	Chapter 13 Bankruptcy
26. The Agreement is hereby amended effective as of the date hereof by adding the following new Exhibit N:
EXHIBIT N
COMPANY’S OBLIGATIONS IN CONNECTION
WITH A RECONSTITUTION
• The Company shall (i) possess the ability to service to a securitization; (ii) service on a “Scheduled/Scheduled” reporting basis (advancing through the liquidation of an REO Property), (iii) make compensating interest payments on payoffs and curtailments and (iv) remit and report to a Master Servicer in format acceptable to such Master Servicer by the 10th calendar day of each month.
• The Company shall provide an acceptable annual certification (officer’s certificate) to the Master Servicer (as required by the Sarbanes-Oxley Act of 2002) as well as any other annual certifications required under the securitization documents (i.e. the annual statement as to compliance/annual independent certified public accountants’ servicing report due by March 1 of each year).
• The Company shall allow for the Purchaser, the Master Servicer or their designee to perform a review of audited financials and net worth of the Company.
• The Company shall provide information on each Custodial Account as requested by the Master Servicer or the Purchaser, and each Custodial Accounts shall comply with the requirements for such accounts as set forth in the securitization documents.
• The Company shall maintain its servicing system in accordance with the requirements of the Master Servicer.
27. The Agreement is hereby amended effective as of the date hereof by adding the following new Exhibit O:
EXHIBIT O
FORM OF COMPANY CERTIFICATION
Re: The [ ] agreement dated as of [ l, 200[ ] (the “Agreement”), among [IDENTIFY PARTIES]
I, ____________________________, the _______________________ of [NAME OF COMPANY] (the “Company”), certify to [the Purchaser], [the Depositor], and the [Master Servicer] [Securities Administrator] [Trustee], and their officers, with the knowledge and intent that they will rely upon this certification, that:
I have reviewed the servicer compliance statement of the Company provided in accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the report on assessment of the Company’s compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing Assessment”), the registered public accounting firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all servicing reports, officer’s certificates and other information relating to the servicing of the Revolving Credit Loans by the Company during 200[ ] that were delivered by the Company to the [Depositor] [Master Servicer] [Securities Administrator] [Trustee] pursuant to the Agreement (collectively, the “Company Servicing Information”);
28. The Agreement is hereby amended effective as of the date hereof by adding the following new Exhibit P:
EXHIBIT P
SUMMARY OF REGULATION AB
SERVICING CRITERIA
NOTE: This Exhibit P is provided for convenience of reference only. In the event of a conflict or inconsistency between the terms of this Exhibit P and the text of Regulation AB, the text of Regulation AB, its adopting release and other public statements of the SEC shall control.
Item 1122(d)
(a)	General servicing considerations.
(1) Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.
(2) If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.
(3) Any requirements in the transaction agreements to maintain a back-up servicer for the Revolving Credit Loans are maintained.
(4) A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.
(b)	Cash collection and administration.
(1) Payments on Revolving Credit Loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.
(2) Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.
(3) Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.
(4) The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.
(5) Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
(6) Unissued checks are safeguarded so as to prevent unauthorized access.
(7) Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.
(c)	Investor remittances and reporting.
(1) Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of Revolving Credit Loans serviced by the Servicer.
(2) Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.
(3) Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.
(4) Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.
(d)	Revolving Credit Loan administration.
(1) Collateral or security on Revolving Credit Loans is maintained as required by the transaction agreements or related Revolving Credit Loan documents.
(2) Revolving Credit Loan and related documents are safeguarded as required by the transaction agreements.
(3) Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.
(4) Payments on Revolving Credit Loans, including any payoffs, made in accordance with the related Revolving Credit Loan documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related Revolving Credit Loan documents.
(5) The Servicer’s records regarding the Revolving Credit Loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.
(6) Changes with respect to the terms or status of an obligor’s Revolving Credit Loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related Revolving Credit Loan documents.
(7) Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.
(8) Records documenting collection efforts are maintained during the period a Revolving Credit Loan is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent Revolving Credit Loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).
(9) Adjustments to interest rates or rates of return for Revolving Credit Loans with variable rates are computed based on the related Revolving Credit Loan documents.
(10) Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s Revolving Credit Loan documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable Revolving Credit Loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related Revolving Credit Loans, or such other number of days specified in the transaction agreements.
(11) Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the Servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.
(12) Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the Servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.
(13) Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the Servicer, or such other number of days specified in the transaction agreements.
(14) Delinquencies, charge-offs and uncollectable accounts are recognized and recorded in accordance with the transaction agreements.
(15) Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.
29. The Agreement is hereby amended effective as of the date hereof by adding the following new Exhibit Q:
EXHIBIT Q
SUMMARY OF APPLICABLE REGULATION AB REQUIREMENTS
NOTE: This Exhibit N is provided for convenience of reference only. In the event of a conflict or inconsistency between the terms of this Exhibit Q and the text of Regulation AB, the text of Regulation AB, its adopting release and other public statements of the SEC shall control.
Item 1105(a)(1)-(3) and (c)
-Provide static pool information with respect to Revolving Credit Loans that were originated or purchased by the Company and which are of the same type as the Revolving Credit Loans.
-Provide static pool information regarding delinquencies, cumulative losses and prepayments for prior securitized pools of the Company.
-If the Company has less than 3 years experience securitizing assets of the same type as the Revolving Credit Loans, provide the static pool information by vintage origination years regarding loans originated or purchased by the Company, instead of by prior securitized pool. A vintage origination year represents Revolving Credit Loans originated during the same year.
-Such static pool information shall be for the prior five years, or for so long as the Company has been originating or purchasing (in the case of data by vintage origination year) or securitizing (in the case of data by prior securitized pools) such Revolving Credit Loans if for less than five years.
-The static pool information for each vintage origination year or prior securitized pool, as applicable, shall be presented in monthly increments over the life of the Revolving Credit Loans included in the vintage origination year or prior securitized pool.
-Provide summary information for the original characteristics of the prior securitized pools or vintage origination years, as applicable and material, including: number of pool assets, original pool balance, weighted average initial loan balance, weighted average mortgage rate, weighted average and minimum and maximum FICO, product type, loan purpose, weighted average and minimum and maximum LTV, distribution of loans by mortgage rate, and geographic concentrations of 5% or more.
Item 1108(b) and (c)
Provide the following information with respect to each servicer that will service, including interim service, 20% or more of the Revolving Credit Loans in any loan group in the securitization issued in the Pass-Through Transfer:
-a description of the Company’s form of organization;
-a description of how long the Company has been servicing residential Revolving Credit Loans; a general discussion of the Company’s experience in servicing assets of any type as well as a more detailed discussion of the Company’s experience in, and procedures for the servicing function it will perform under this Agreement and any Reconstitution Agreements; information regarding the size, composition and growth of the Company’s portfolio of Revolving Credit Loans of the type similar to the Revolving Credit Loans and information on factors related to the Company that may be material to any analysis of the servicing of the Revolving Credit Loans or the related asset-backed securities, as applicable, including whether any default or servicing related performance trigger has occurred as to any other securitization due to any act or failure to act of the Company, whether any material noncompliance with applicable servicing criteria as to any other securitization has been disclosed or reported by the Company, and the extent of outsourcing the Company uses;
-a description of any material changes to the Company’s policies or procedures in the servicing function it will perform under this Agreement and any Reconstitution Agreements for Revolving Credit Loans of the type similar to the Revolving Credit Loans during the past three years;
-information regarding the Company’s financial condition to the extent that there is a material risk that the effect on one or more aspects of servicing resulting from such financial condition could have a material impact on the performance of the securities issued in the Pass-Through Transfer, or on servicing of Revolving Credit Loans of the same asset type as the Revolving Credit Loans;
-any special or unique factors involved in servicing loans of the same type as the Revolving Credit Loans, and the Company’s processes and procedures designed to address such factors;
-statistical information regarding principal and interest advances made by the Company on the Revolving Credit Loans and the Company’s overall servicing portfolio for the past three years; and
-the Company’s process for handling delinquencies, losses, bankruptcies and recoveries, such as through liquidation of REO Properties, foreclosure, sale of the Revolving Credit Loans or workouts.
Item 1110(a)
-Identify any originator or group of affiliated originators that originated, or is expected to originate, 10% or more of the Revolving Credit Loans in any loan group in the securitization issued in the Pass-Through Transfer.
Item 1110(b)
Provide the following information with respect to any originator or group of affiliated originators that originated, or is expected to originate, 20% or more of the Revolving Credit Loans in any loan group in the securitization issued in the Pass-Through Transfer:
-the Company’s form of organization; and
-a description of the Company’s origination program and how long the Company has been engaged in originating residential Revolving Credit Loans, which description must include a discussion of the Company’s experience in originating Revolving Credit Loans of the same type as the Revolving Credit Loans and information regarding the size and composition of the Company’s origination portfolio as well as information that may be material to an analysis of the performance of the Revolving Credit Loans, such as the Company’s credit-granting or underwriting criteria for Revolving Credit Loans of the same type as the Revolving Credit Loans.
Item 1117
-describe any legal proceedings pending against the Company or against any of its property, including any proceedings known to be contemplated by governmental authorities, that may be material to the holders of the securities issued in the Pass-Through Transfer.
Item 1119(a)
-describe any affiliations of the Company, each other originator of the Revolving Credit Loans and each Subservicer with the sponsor, depositor, issuing entity, trustee, any originator, any other servicer, any significant obligor, enhancement or support provider or any other material parties related to the Pass-Through Transfer.
Item 1119(b)
-describe any business relationship, agreement, arrangement, transaction or understanding entered into outside of the ordinary course of business or on terms other than those obtained in an arm’s length transaction with an unrelated third party, apart from the Pass-Through Transfer, between the Company, each other originator of the Revolving Credit Loans and each Subservicer, or their respective affiliates, and the sponsor, depositor or issuing entity or their respective affiliates, that exists currently or has existed during the past two years, that may be material to the understanding of an investor in the securities issued in the Pass-Through Transfer.
Item 1119(c)
-describe any business relationship, agreement, arrangement, transaction or understanding involving or relating to the Revolving Credit Loans or the Pass-Through Transfer, including the material terms and approximate dollar amount involved, between the Company, each other originator of the Revolving Credit Loans and each Subservicer, or their respective affiliates and the sponsor, depositor or issuing entity or their respective affiliates, that exists currently or has existed during the past two years.
30. The Agreement is hereby amended effective as of the date hereof by adding the following new Exhibit R:
EXHIBIT R
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name of Subservicer] shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria”:
*Servicing Criteria*		*Applicable Servicing Criteria*

Reference	Criteria

	General Servicing Considerations

1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.

1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.

1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the Revolving Credit Loans are maintained.

1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.

	Cash Collection and Administration

1122(d)(2)(i)	Payments on Revolving Credit Loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.

1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.

1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.

1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.

1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.

1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.

1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.

	Investor Remittances and Reporting

1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of Revolving Credit Loans serviced by the Servicer.

1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.

1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.

1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.

	Pool Asset Administration

1122(d)(4)(i)	Collateral or security on Revolving Credit Loans is maintained as required by the transaction agreements or related Revolving Credit Loan documents.

1122(d)(4)(ii)	Revolving Credit Loan and related documents are safeguarded as required by the transaction agreements

1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.

1122(d)(4)(iv)	Payments on Revolving Credit Loans, including any payoffs, made in accordance with the related Revolving Credit Loan documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related Revolving Credit Loan documents.

1122(d)(4)(v)	The Servicer’s records regarding the Revolving Credit Loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.

1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor's Revolving Credit Loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.

1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.

1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a Revolving Credit Loan is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent Revolving Credit Loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).

1122(d)(4)(ix)	Adjustments to interest rates or rates of return for Revolving Credit Loans with variable rates are computed based on the related Revolving Credit Loan documents.

1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s Revolving Credit Loan documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable Revolving Credit Loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related Revolving Credit Loans, or such other number of days specified in the transaction agreements.

1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.

1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.

1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.

1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.

1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.
	[NAME OF COMPANY] [NAME OF SUBSERVICER]

	Date:



	By:
	Name:
	Title:
31. The Agreement is hereby amended as of the date hereof by adding the following new Exhibit S:
EXHIBIT S
REPORTING DATA FOR REALIZED LOSSES AND GAINS
Calculation of Realized Loss/Gain Form 332- Instruction Sheet
The numbers on the 332 form correspond with the numbers listed below.
Liquidation and Acquisition Expenses:
1. The Actual Unpaid Principal Balance of the Revolving Credit Loan. For documentation, an Amortization Schedule from date of default through liquidation breaking out the net interest and servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of the Revolving Credit Loan as calculated on a monthly basis. For documentation, an Amortization Schedule from date of default through liquidation breaking out the net interest and servicing fees advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form - breakdown required showing period
of coverage, base tax, interest, penalty. Advances prior to default require evidence of servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and WFB’s approved Officer Certificate
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
Credits:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3^rd Party Sale, bid instructions and Escrow Agent / Attorney
Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22.
The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial proceeds and line (18b) for Part B/Supplemental proceeds.
Total Realized Loss (or Amount of Any Gain)
23. The total derived from subtracting line 22 from 13. If the amount represents a realized gain, show the amount in parenthesis ( ).
Calculation of Realized Loss/Gain Form 332
Prepared by:			Date:
Phone:			Email Address
Servicer Loan No.		Servicer Name		Servicer Address
WELLS FARGO BANK, N.A. Loan No.
Borrower's Name:
Property Address:
Liquidation Type:
REO Sale
3^rd Party Sale
Short Sale
Charge Off
Was this loan granted a Bankruptcy deficiency or cramdown
Yes
If “Yes”, provide deficiency or cramdown amount _______________________________
Liquidation and Acquisition Expenses:
(1)	Actual Unpaid Principal Balance of Revolving Credit Loan	$ _______________	(1)
(2)	Interest accrued at Net Rate	________________	(2)
(3)	Accrued Servicing Fees	________________	(3)
(4)	Attorney's Fees	________________	(4)
(5)	Taxes (see page 2)	________________	(5)
(6)	Property Maintenance	________________	(6)
(7)	MI/Hazard Insurance Premiums (see page 2)	________________	(7)
(8)	Utility Expenses	________________	(8)
(9)	Appraisal/BPO	________________	(9)
(10)	Property Inspections	________________	(10)
(11)	FC Costs/Other Legal Expenses	________________	(11)
(12)	Other (itemize)	________________	(12)
	Cash for Keys__________________________	________________	(12)
	HOA/Condo Fees_______________________	________________	(12)
	______________________________________	________________	(12)
Total Expenses		$ _______________	(13)
Credits:
(14)	Escrow Balance	$ _______________	(14)
(15)	HIP Refund	________________	(15)
(16)	Rental Receipts	________________	(16)
(17)	Hazard Loss Proceeds	________________	(17)
(18)	Primary Mortgage Insurance / Gov’t Insurance	________________	(18a)
	HUD Part A

	HUD Part B		(18b)
(19)	Pool Insurance Proceeds	________________
(19)
(20)	Proceeds from Sale of Acquired Property	________________	(20)
(21)	Other (itemize)	________________	(21)
	_________________________________________	________________	(21)
Total Credits		$________________	(22)
Total Realized Loss (or Amount of Gain)		$________________	(23)
Escrow Disbursement Detail
Type (Tax /Ins.)	Date Paid	Period of Coverage	Total Paid	Base Amount	Penalties	Interest
32. Except as amended above, the Agreement shall continue to be in full force and effect in accordance with its terms.
33. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts and of said counterparts taken together shall be deemed to constitute one and the same instrument.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the following parties have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.
	EMC MORTGAGE CORPORATION,
	as Purchaser

	By:
	Name:
	Title:


	GREENPOINT MORTGAGE FUNDING, INC.,
	as Company

	By:
	Name:
	Title:
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This is an Assignment, Assumption and Recognition Agreement (this “AAR Agreement”) made as of April 30, 2007, among EMC Mortgage Corporation (the “Assignor”), Citibank, N.A. (the “Assignee”), not individually but solely as indenture trustee (the “Indenture Trustee”) for the holders of Bear Stearns Second Lien Trust 2007-1, Mortgage-Backed Notes, Series 2007-1 and GreenPoint Mortgage Funding, Inc. (the “Company”).
In consideration of the mutual promises contained herein the parties hereto agree that the revolving credit loans (the “Assigned Loans”) listed on Attachment 1 annexed hereto (the "Assigned Loan Schedule") purchased by the Assignor from the Company and now serviced by Company for Assignor and its successors and assigns pursuant to (a) the Seller’s Purchase, Warranties and Servicing Agreement, dated as of October 18, 2004, between Assignor and Company, as amended by Amendment Number One dated as of September 20, 2006 (the “Purchase Agreement”) and (b) the term sheets dated September 27, 2006, October 27, 2006, November 28, 2006, December 21, 2006, December 28, 2006 and January 26, 2007 between the Assignor and the Company (together, the “Term Sheets” and together with the Purchase Agreement, the “Agreements”) shall be subject to the terms of this AAR Agreement. Capitalized terms used herein but not defined shall have the meanings ascribed to them in the Purchase Agreement.
Assignment and Assumption
Except as expressly provided for herein, the Assignor hereby grants, transfers and assigns to the Assignee all of its right, title and interest in, to and under (a) the Assigned Loans and (b) the Purchase Agreement with respect to the Assigned Loans; provided, however, that the Assignor is not assigning to the Assignee any of its right, title or interest, in, to and under the Purchase Agreement with respect to any revolving credit loans other than the Assigned Loans listed on Attachment 1 annexed hereto. Notwithstanding anything to the contrary contained herein, the Assignor specifically reserves and does not assign to the Assignee any right, title and interest in, to or under the representations and warranties contained in Section 3.01 and Section 3.02 of the Purchase Agreement and in the Term Sheets, and any obligation of the Company to cure, repurchase or substitute for a revolving credit loan and to indemnify the Assignor with respect to a breach of such representations and warranties pursuant to Section 3.03 and Section 8.01 of the Purchase Agreement, and the Assignor is retaining the right to enforce the representations and warranties set forth in those sections against the Company. In addition, the Assignor specifically reserves and does not assign to the Assignee any right, title and interest in, to or under Section 3.04 and Section 3.05 of the Purchase Agreement. The Assignor specifically reserves and does not assign to the Assignee its right to purchase any Additional Balances created on or after the related Cut-off Date under the Purchase Agreement. The Assignor hereby agrees to pay to the Company the amount of any Additional Balances transferred to the Assignor under the Purchase Agreement in accordance with Section 5.01 of the Purchase Agreement. The Assignee shall have no obligation to fund any Additional Balances created and transferred to the Assignor under the Purchase Agreement.
Except as is otherwise expressly provided herein, the Assignor makes no representations, warranties or covenants to the Assignee and the Assignee acknowledges that the Assignor has no obligations to the Assignee under the terms of the Purchase Agreement or otherwise relating to the transaction contemplated herein (including, but not limited to, any obligation to indemnify the Assignee).
Representations, Warranties and Covenants
1. Assignor warrants and represents to Assignee, the Note Insurer and Company as of the date hereof:
(a) Attached hereto as Attachment 2 are true and accurate copies of the Purchase Agreement and the Term Sheets which agreements are in full force and effect as of the date hereof and the provisions of which have not been waived, amended or modified in any respect, nor has any notice of termination been given thereunder;
(b) Assignor is the lawful owner of the Assigned Loans with full right to transfer the Assigned Loans and any and all of its interests, rights and obligations under the Purchase Agreement as they relate to the Assigned Loans, free and clear from any and all claims and encumbrances; and upon the transfer of the Assigned Loans to Assignee as contemplated herein, Assignee shall have good title to each and every Assigned Loan, as well as any and all of Assignee’s interests, rights and obligations under the Purchase Agreement as they relate to the Assigned Loans, free and clear of any and all liens, claims and encumbrances;
(c) There are no offsets, counterclaims or other defenses available to Company with respect to the Assigned Loans or the Purchase Agreement;
(d) Assignor has no knowledge of, and has not received notice of, any waivers under, or any modification of, any Assigned Loan;
(f) Assignor has full corporate power and authority to execute, deliver and perform its obligations under this AAR Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this AAR Agreement is in the ordinary course of Assignor’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of Assignor’s charter or by-laws or any legal restriction, or any material agreement or instrument to which Assignor is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which Assignor or its property is subject. The execution, delivery and performance by Assignor of this AAR Agreement and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of Assignor. This AAR Agreement has been duly executed and delivered by Assignor and, upon the due authorization, execution and delivery by Assignee and Company, will constitute the valid and legally binding obligation of Assignor enforceable against Assignor in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law;
(h) Neither Assignor nor anyone acting on its behalf has offered, transferred, pledged, sold or otherwise disposed of the Assigned Loans or any interest in the Assigned Loans, or solicited any offer to buy or accept a transfer, pledge or other disposition of the Assigned Loans, or any interest in the Assigned Loans or otherwise approached or negotiated with respect to the Assigned Loans, or any interest in the Assigned Loans with any Person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action which would constitute a distribution of the Assigned Loans under the Securities Act of 1933, as amended (the “1933 Act”) or which would render the disposition of the Assigned Loans a violation of Section 5 of the 1933 Act or require registration pursuant thereto;
(i) The Assignor has received from Company, and has delivered to the Assignee, all documents required to be delivered to Assignor by the Company prior to the date hereof pursuant to the Purchase Agreement with respect to the Assigned Loans and has not received, and has not requested from the Company, any additional documents; and
(j) There is no action, suit, proceeding, investigation or litigation pending or, to Assignor's knowledge, threatened, which either in any instance or in the aggregate, if determined adversely to Assignor, would adversely affect Assignor's execution or delivery of, or the enforceability of, this AAR Agreement, or the Assignor's ability to perform its obligations under this AAR Agreement.
2. Assignee warrants and represents to, and covenants with, Assignor, the Note Insurer and Company as of the date hereof:
(a) Assignee is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to hold the Assigned Loans as Indenture Trustee on behalf of the holders of the Bear Stearns Second Lien Trust 2007-1, Mortgage-Backed Notes, Series 2007-1 (“Bear Stearns Second Lien Trust 2007-1”);
(b) Assignee has full corporate power and authority to execute, deliver and perform its obligations under this AAR Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this AAR Agreement is in the ordinary course of Assignee’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of Assignee’s charter or by-laws or any legal restriction, or any material agreement or instrument to which Assignee is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which Assignee or its property is subject. The execution, delivery and performance by Assignee of this AAR Agreement and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on part of Assignee. This AAR Agreement has been duly executed and delivered by Assignee and, upon the due authorization, execution and delivery by Assignor and Company, will constitute the valid and legally binding obligation of Assignee enforceable against Assignee in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law;
(d) There is no action, suit, proceeding, investigation or litigation pending or, to Assignee's knowledge, threatened, which either in any instance or in the aggregate, if determined adversely to Assignee, would adversely affect Assignee's execution or delivery of, or the enforceability of, this AAR Agreement, or the Assignee's ability to perform its obligations under this AAR Agreement; and
(e) Assignee assumes for the benefit of each of the Assignor and the Company all of the rights of the Purchaser under the Purchase Agreement with respect to the Assigned Loans.
3. Company warrants and represents to, and covenant with, Assignor, the Note Insurer and Assignee as of the date hereof:
(b) Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite power and authority to service the Assigned Loans and otherwise to perform its obligations under the Purchase Agreement;
(c) Company has full corporate power and authority to execute, deliver and perform its obligations under this AAR Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this AAR Agreement is in the ordinary course of Company’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of Company’s charter or by-laws or any legal restriction, or any material agreement or instrument to which Company is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which Company or its property is subject. The execution, delivery and performance by Company of this AAR Agreement and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of Company. This AAR Agreement has been duly executed and delivered by Company, and, upon the due authorization, execution and delivery by Assignor and Assignee, will constitute the valid and legally binding obligation of Company, enforceable against Company in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law;
(e) The Company shall establish a Custodial Account and an Escrow Account under the Purchase Agreement in favor of and in the name of the Assignee, as Indenture Trustee for the holders of Bear Stearns Second Lien Trust 2007-1, Mortgage-Backed Notes, Series 2007-1, with respect to the Assigned Loans separate from the Custodial Account and Escrow Account previously established under the Purchase Agreement in favor of Assignor;
(f) No event has occurred from the Closing Date to the date hereof which would render the representations and warranties as to the related Assigned Loans made by the Company in Sections 3.01 and 3.02 of the Purchase Agreement or in the Term Sheets to be untrue in any material respect; and
(g) Neither this AAR Agreement nor any certification, statement, report or other agreement, document or instrument furnished or to be furnished by the Company pursuant to this AAR Agreement contains or will contain any materially untrue statement of fact or omits or will omit to state a material fact necessary to make the statements contained therein not misleading.
4. Company warrants and represents to, and covenants with, Assignor, the Note Insurer and Bear Stearns Asset Backed Securities I LLC (“BSABS I”) as of the date hereof:
(a) Company is not aware and has not received notice that any default, early amortization or other performance triggering event has occurred as to any other securitization due to any act or failure to act of the Company;
(b) No material noncompliance with the applicable servicing criteria with respect to other securitizations of residential mortgage loans involving the Company as servicer has been disclosed or reported by the Company;
(c) Company has not been terminated as servicer in a residential mortgage loan securitization, either due to a servicing default or to application of a servicing performance test or trigger;
(d) No material changes to the Company’s policies or procedures with respect to the servicing function it will perform under the Purchase Agreement and this AAR Agreement for mortgage loans of a type similar to the Assigned Loans have occurred during the three-year period immediately preceding the date hereof;
(e) There are no aspects of the Company’s financial condition that could have a material adverse effect on the performance by the Company of its servicing obligations under the Purchase Agreement and this AAR Agreement;
(f) There are no material legal or governmental proceedings pending (or known to be contemplated) against the Company, any Subservicer or any third-party originator; and
(g) There are no affiliations, relationships or transactions relating to the Company or any Subservicer with respect to this Securitization Transaction and any party thereto of a type described in Item 1119 of Regulation AB.
Each such notice/update should be sent to the Assignor by e-mail to regABnotifications@bear.com. Additionally, all such notifications, other than those pursuant to (i)(A) above, should be sent to:
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751
With a copy to:
Bear, Stearns & Co. Inc.
383 Madison Avenue, 3rd Floor
New York, NY 10179
Attention: Global Credit Administration
Facsimile: (212) 272-6564
Notifications pursuant to (i)(A) above should be sent to:
EMC Mortgage Corporation
2780 Lake Vista Drive
Lewisville, TX 75067
Attention: General Counsel
Facsimile: (469) 759-4714
With copies to:
Bear, Stearns & Co. Inc.
383 Madison Avenue, 3rd Floor
New York, NY 10179
Attention: Global Credit Administration
Facsimile: (212) 272-6564
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751
5. Assignor hereby agrees to indemnify and hold the Assignee (and its successors and assigns) harmless against any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that Assignee (and its successors and assigns) may sustain in any way related to any breach of the representations or warranties of Assignor set forth in this AAR Agreement or the breach of any covenant or condition contained herein.
Recognition of Assignee
6. From and after the date hereof, Company shall recognize Assignee as owner of the Assigned Loans, and acknowledges that the Assigned Loans will be part of a REMIC, and will service the Assigned Loans in accordance with the Purchase Agreement (as modified by this AAR Agreement) but in no event in a manner that would (i) cause any REMIC to fail to qualify as a REMIC or (ii) result in the imposition of a tax upon any REMIC (including but not limited to the tax on prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in Section 860G(d) of the Code). It is the intention of Assignor, Company and Assignee that this AAR Agreement shall be binding upon and for the benefit of the respective successors and assigns of the parties hereto. Neither Company nor Assignor shall amend or agree to amend, modify, waive, or otherwise alter any of the terms or provisions of the Purchase Agreement which amendment, modification, waiver or other alteration would in any way affect the Assigned Loans without the prior written consent of Assignee and the Note Insurer.
7. It is expressly understood and agreed by the parties hereto that insofar as this AAR Agreement is executed on behalf of the Assignee (i) this AAR Agreement is executed and delivered by Citibank, N.A., not in its individual capacity but solely as Indenture Trustee under the Sale and Servicing Agreement and the Indenture in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Assignee is made and intended not as representations, warranties, covenants, undertakings and agreements by Citibank, N.A. in its individual capacity, but is made and intended for the purpose of binding only the Assignee, (iii) under no circumstances shall Citibank, N.A. in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Assignee or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Assignee under this AAR Agreement and (iv) any recourse against the Assignee in respect of any obligations it may have under or pursuant to the terms of this AAR Agreement shall be limited solely to the assets it may hold as Indenture Trustee of Bear Stearns Second Lien Trust 2007-1.
8. The Company shall indemnify and hold harmless the Assignor, each affiliate of the Assignor, and each of the following parties participating in a Pass-Through Transfer: each sponsor, issuing entity and credit enhancer, each Person (including, but not limited to, any Master Servicer, if applicable) responsible for the preparation, execution or filing of any report required to be filed with the Commission with respect to such Pass-Through Transfer, or for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such Pass-Through Transfer; each broker dealer acting as underwriter, placement agent or initial purchaser, each Person who controls any of such parties or the Depositor (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act); and the respective present and former directors, officers, employees, agents and affiliates of each of the foregoing and of the Depositor (each, an “Indemnified Party”), and shall hold each of them harmless from and against any claims, losses, damages, penalties, fines, forfeitures, legal fees and expenses and related costs, judgments, and any other costs, fees and expenses that any of them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or alleged to be contained in any written information, written report, certification, data, accountants’ letter or other material provided under Section 11.01 of the Purchase Agreement by or on behalf of the Company, or provided under Section 11.01 of the Purchase Agreement by or on behalf of any Subservicer, Subcontractor or Third-Party Originator (collectively, the “Company Information”), or (B) the omission or alleged omission to state in the Company Information a material fact required to be stated in the Company Information or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, by way of clarification, that clause (B) of this paragraph shall be construed solely by reference to the Company Information and not to any other information communicated in connection with a sale or purchase of securities, without regard to whether the Company Information or any portion thereof is presented together with or separately from such other information;
(ii) any breach by the Company of its obligations under Section 11.01 of the Purchase Agreement, including particularly any failure by the Company, any Subservicer, any Subcontractor or any Third-Party Originator to deliver any information, report, certification, accountants’ letter or other material when and as required under Section 11.01 of the Purchase Agreement, including any failure by the Company to identify pursuant to Section 12.17 of the Purchase Agreement any Subcontractor “participating in the servicing function” within the meaning of Item 1122 of Regulation AB;
(iii) any breach by the Company of a representation or warranty set forth in Section 3.01 of the Purchase Agreement or in a writing furnished pursuant to Section 3.01(s) of the Purchase Agreement and made as of a date prior to the closing date of the related Pass-Through Transfer, to the extent that such breach is not cured by such closing date, or any breach by the Company of a representation or warranty in a writing furnished pursuant to Section 3.01(s) of the Purchase Agreement to the extent made as of a date subsequent to such closing date; or
(iv) the negligence bad faith or willful misconduct of the Company in connection with its performance under Section 11.01 of the Purchase Agreement.
In the case of any failure of performance described above, the Company shall promptly reimburse the Assignor, any Depositor, as applicable, and each Person responsible for the preparation, execution or filing of any report required to be filed with the Commission with respect to such Securitization Transaction, or for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such Securitization Transaction, for all costs reasonably incurred by each such party in order to obtain the information, report, certification, accountants’ letter or other material not delivered as required by the Company, any Subservicer, any Subcontractor or any Third-Party Originator.
This indemnification shall survive the termination of this Agreement or the termination of any party to this Agreement.
The Assignee and the Note Insurer shall have the benefit of the Indemnification provided by the Servicer pursuant to Section 8.01 of the Agreement as a result of the assignment of the Servicer’s rights and obligations assigned pursuant to this agreement.
9. The Company shall prepare for and deliver to the Assignee and the Master Servicer (and the securities administrator, if any) a statement with respect to each mortgaged property acquired through foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Assigned Loan (“REO Property”) that has been rented showing the aggregate rental income received and all expenses incurred in connection with the management and maintenance of such REO Property at such times as is necessary to enable the Assignee (or the securities administrator, if any) to comply with the reporting requirements of the REMIC provisions of the Code. The net monthly rental income, if any, from such REO Property shall be deposited in the related collection account no later than the close of business on each determination date. The Company shall perform, or caused to be performed, the tax reporting and withholding related to foreclosures, abandonments and cancellation of indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code by preparing and filing such tax and information returns, as may be required. In the event that Bear Stearns Second Lien Trust 2007-1 acquires any REO Property as aforesaid or otherwise in connection with a default or default becoming reasonably foreseeable on an Assigned Loan, the Company shall cause such REO Property to be disposed prior to three years after its acquisition by Bear Stearns Second Lien Trust 2007-1, or, at the expense of Bear Stearns Second Lien Trust 2007-1, request more than 60 days prior to the day on which such three-year period would otherwise expire, an extension of the three-year grace period unless the Assignee (or the Securities Administrator, if any) shall have been supplied with an opinion of counsel addressed to the Assignee (and the Securities Administrator, if any) rendered by nationally recognized tax counsel specializing in such matters (such opinion not to be an expense of the Indenture Trustee or the Securities Administrator) to the effect that the holding by Bear Stearns Second Lien Trust 2007-1 of such REO Property subsequent to such three-year period will not result in the imposition of taxes on “prohibited transactions” of any REMIC as defined in Section 860F of the Code or cause any REMIC to fail to qualify as a REMIC, in which case Bear Stearns Second Lien Trust 2007-1 may continue to hold such REO Property (subject to any conditions contained in such opinion of counsel). Notwithstanding any other provision of the Sale and Servicing Agreement, no REO Property acquired by Bear Stearns Second Lien Trust 2007-1 shall be rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of Bear Stearns Second Lien Trust 2007-1 in such a manner or pursuant to any terms that would (i) cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code or (ii) subject any REMIC to the imposition of any federal, state or local income taxes on the income earned from such REO Property under Section 860G(c) of the Code or otherwise, unless the Company has agreed to indemnify and hold harmless Bear Stearns Second Lien Trust 2007-1 with respect to the imposition of any such taxes.
10. The rights set forth under Section 6.06 relating to the Purchaser’s right to examine Servicer records may be exercised by the Master Servicer on behalf of the Assignee.
11. The rights set forth under Sections 8.04 and 8.05 relating to any Servicer resignation and transfer of Serving may be exercised by the Master Servicer, on behalf of the Assignee.
Modification of Purchase Agreement
1. The Company and Assignor hereby amend the Purchase Agreement as follows:
(a) The following definitions are added to Article I of the Purchase Agreement:
Collection Period: With respect to any Payment Date, the calendar month immediately preceding the calendar month in which such Payment Date occurs.
Cut-Off Date: With respect to the Revolving Credit Loans, April 1, 2007
Indenture: That certain Indenture dated as of April 30, 2007, among Bear Stearns Second Lien Trust 2007-1, as issuing entity, LaSalle Bank National Association, as securities administrator and Citibank, N.A., as indenture trustee.
Indenture Trustee: Citibank, N.A., or its successor in interest, or any successor indenture trustee appointed as provided in the Sale and Servicing Agreement and the Indenture.
Master Servicer: LaSalle Bank National Association, or its successors in interest who meet the qualifications of the Sale and Servicing Agreement and this Agreement.
Securities Administrator: LaSalle Bank National Association, or its successors in interest who meet the qualifications of the Sale and Servicing Agreement and this Agreement.
Sale and Servicing Agreement: That certain sale and servicing agreement dated as of April 30, 2007, among Bear Stearns Asset Backed Securities I LLC, as the depositor, Bear Stearns Second Lien Trust 2007-1, as the issuing entity, Citibank, N.A., as indenture trustee, LaSalle Bank National Association, as master servicer and as securities administrator and EMC Mortgage Corporation, as seller and sponsor.
Subsequent Recoveries: As of any Remittance Date, any amount recovered by the Servicer or the Master Servicer (net of reimbursable expenses) with respect to any Revolving Credit Loan that has been previously charged off or liquidated.
(b) The definition of Billing Cycle is deleted in its entirety and replaced with the following:
Billing Cycle: With respect to any Revolving Credit Loan and any subsequent Due Date, the calendar month immediately preceding such Due Date.
(d) The definition of “Remittance Date” is deleted in its entirety and replaced with the following:
Remittance Date: The 18th calendar day (or if such 18th calendar day is not a Business Day, then the preceding Business Day) of any month.
(e) The caption and first paragraph of Amendment Number One to the Purchase Agreement is modified as follows:
AMENDMENT NUMBER ONE
to the
SELLER’S PURCHASE, WARRANTIES AND SERVICING AGREEMENT
Dated as of September 20, 2006
between
EMC MORTGAGE CORPORATION,
as Purchaser
and
GREENPOINT MORTGAGE FUNDING, INC.,
as Seller and Servicer
This AMENDMENT NUMBER ONE (this “Amendment”) is made and entered into this 20^th of September, 2006, by and between EMC Mortgage Corporation, a Delaware corporation, as purchaser (the “Purchaser”) and GreenPoint Mortgage Funding, Inc., as seller (in that capacity the “Seller”) and servicer (in that capacity the “Servicer”) in connection with the Seller’s Purchase, Warranties and Servicing Agreement, dated as of October 18, 2004, between the above mentioned parties (the “Agreement”).
(f) The Amendment Number One to the Purchase Agreement is modified in its entirety as follows:
Each reference to the defined term “Company” shall be replaced with the defined term “Servicer.”
(g) The second sentence of the second paragraph of Section 2.02 of the Purchase Agreement shall be deleted in its entirety and replaced with the following:
“With respect to each Additional Balance transferred hereunder, the Seller shall fund such Additional Balance and the Class S Certificateholder shall pay or cause the Servicer to pay to the Seller, the portion of the Purchase Price specified above in clause (c) for such Additional Balance pursuant to Section 4.05(v) hereof in an amount equal to the related Draw and if the amount on deposit with respect to principal collections in the Custodial Account is insufficient, then the Class S Certificateholder shall remit the amount of such insufficiency directly to the Seller in accordance with Section 5.01 herein.”
(h) Section 4.01 of the Purchase Agreement is hereby amended by adding the underlined text to the second paragraph of Section 4.01:
Consistent with and in addition to the terms set forth in this Agreement, if a Revolving Credit Loan is in default or such default is reasonably foreseeable, the Servicer may waive, modify or vary any term of any Revolving Credit Loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any mortgagor, including without limitation, to (1) capitalize any amounts owing on the Revolving Credit Loan by adding such amount to the outstanding principal balance of the Revolving Credit Loan, (2) defer such amounts to a later date or the final payment date of such Revolving Credit Loan, (3) extend the maturity of any such Revolving Credit Loan, (4) amend the related Mortgage Note to reduce the related Mortgage Interest Rate with respect to any Revolving Credit Loan, (5) convert the Mortgage Interest Rate on any Revolving Credit Loan from a fixed rate to an adjustable rate or vice versa, (6) with respect to a Revolving Credit Loan with an initial fixed rate period followed by an adjustable rate period, extend the fixed period and reduce the adjustable rate period, and/or (7) forgive the amount of any interest and principal owed by the related Mortgagor; provided that, in the Servicer’s reasonable and prudent determination, such waiver, modification, postponement or indulgence: (A) is not materially adverse to the interests of the Purchaser on a present value basis using reasonable assumptions (including taking into account any estimated Realized Loss that might result absent such action); and (B) does not amend the related Mortgage Note to extend the maturity thereof later than the date of the Latest Possible Maturity Date (as such term is defined in the related pooling and servicing agreement); provided, further, with respect to any Revolving Credit Loan that is not in default or if default is not reasonably foreseeable, unless the Servicer has provided to the Purchaser a certification addressed to the Purchaser, based on the advice of counsel or certified public accountants that have a national reputation with respect to taxation of REMICs that a modification of such Revolving Credit Loan will not result in the imposition of taxes on or disqualify from REMIC status any of the REMICs and has obtained the prior written consent of the Purchaser, the Servicer shall not permit any modification with respect to any Revolving Credit Loan. Notwithstanding the foregoing, for any modification which may result in a realized loss of 20% or more of the outstanding principal balance of a Revolving Credit Loan, the Company shall present such proposed modification, together with any supporting documentation, to the Master Servicer for consideration and approval.
In the event of any such waiver, modification, postponement or indulgence which has been agreed to in writing by the Purchaser and which permits the deferral of interest or principal payments on any Revolving Credit Loan, the Servicer shall, on the Business Day immediately preceding the related Remittance Date in any month in which any such principal or interest payment has been deferred, deposit in the Custodial Account from its own funds, in accordance with Section 4.04, the difference between (a) such month's principal and one month's interest at the related Revolving Credit Loan Remittance Rate on the unpaid principal balance of such Revolving Credit Loan and (b) the amount paid by the Mortgagor. The Servicer shall be entitled to reimbursement for such advances to the same extent as for all other advances pursuant to Section 4.05. Without limiting the generality of the foregoing, the Servicer shall continue, and is hereby authorized and empowered, to prepare, execute and deliver, all instruments of satisfaction or cancellation, or of partial or full release, discharge and all other comparable instruments, with respect to the Revolving Credit Loans and with respect to the Mortgaged Properties.
(i) Section 4.03 of the Purchase Agreement is amended by adding the following paragraphs at the end thereof:
The Servicer must charge off a Revolving Credit Loan at the time such Revolving Credit Loan becomes 180 days delinquent unless the Servicer reasonably believes, in accordance with Accepted Servicing Practices, that it may be able to obtain a net recovery through foreclosure proceedings or other conversion of the related Revolving Credit Loan. Once a Revolving Credit Loan is charged off, the Servicer will not be entitled to any additional servicing fee for such Revolving Credit Loan, except to the extent of any unpaid Servicing Fees and expenses which will be reimbursable from any recoveries on such Revolving Credit Loan, and the Revolving Credit Loan will be treated as a liquidated Revolving Credit Loan.
Unless a Trigger Event is in effect or specific Subsequent Recoveries are anticipated, as applicable, on a particular Revolving Credit Loan that is charged off as described in the preceding paragraph, such charged off Revolving Credit Loan will be released from the trust estate, and will be transferred to the Class X Certificateholders. If any Subsequent Recoveries are anticipated on such charged-off Revolving Credit Loan, the release of such Revolving Credit Loan from the trust estate will be delayed until the payment date after receipt of such Subsequent Recoveries. After the release of a charged-off Revolving Credit Loan, the Class X Certificateholders will be entitled to any amounts subsequently received in respect of any such released charged-off Revolving Credit Loan, subject to any fees or expenses owed to the Servicer. Such Class X Certificateholder may designate any servicer to service any such released charged-off Revolving Credit Loan and the Class X Certificateholder may sell any such released charged-off Revolving Credit Loan to a third party. To the extent the servicing of such released charged-off Revolving Credit Loan is not transferred from the Servicer, the servicing of such released charged-off Revolving Credit Loan and the fees therefor shall be governed by a separate servicing agreement under terms similar to this Agreement.
(j) Subsection 4.05(v) of the Purchase Agreement is deleted in its entirety and replaced with the following:
“(v) subject to the terms and conditions of Section 5.01 below, to pay to the Seller the amount of any Additional Balances funded by the Seller from payments on account of principal on deposit in the Custodial Account;”
(k) The following is added as Section 4.16 of the Purchase Agreement:
“Section 4.16 Waiver of Prepayment Penalties.
The Servicer shall not waive any Prepayment Penalty unless: (i) such waiver is standard and customary in servicing similar mortgage loans to the Revolving Credit Loans (including any waiver of a Prepayment Penalty in connection with a refinancing of a Revolving Credit Loan related to a default or a reasonably foreseeable default), and (ii) such waiver, in the reasonable judgment of the Servicer, would maximize recovery of total proceeds from the Revolving Credit Loan, taking into account the value of such Prepayment Penalty and the related Revolving Credit Loan. In no event will the Servicer waive a Prepayment Penalty in connection with a refinancing of a Revolving Credit Loan that is not related to a default or a reasonably foreseeable default. If a Prepayment Penalty is waived, but does not meet the standards described above, then the Servicer is required to pay the amount of such waived Prepayment Penalty by remitting such amount to the Master Servicer by the Remittance Date.”
(l) The first and second paragraphs of Section 5.01 of the Purchase Agreement shall be deleted in their entirety and replaced with the following:
“On each Remittance Date, the Servicer shall distribute, by wire transfer to the related account specified on Exhibit J hereto, to the Purchaser all amounts required to be on deposit in the Custodial Account as of the close of business on the last day of the month immediately preceding the month in which the related Remittance Date occurs, net of charges against or withdrawals from the Custodial Account pursuant to Section 4.05.
The Servicer shall furnish to each of the Master Servicer and the Class S Certificateholder (as defined in the Sale and Servicing Agreement) a monthly remittance report in accordance with Section 5.02. The monthly remittance report shall indicate the aggregate amount of Additional Balances created during the prior calendar month. If the monthly remittance report indicates that (i) (x) the aggregate amount of Additional Balances created during the prior calendar month exceeds (y) the amount required to be on deposit in the Custodial Account with respect to principal collections as of the close of business on the last day of the month immediately preceding the month in which the related Remittance Date occurs (which amount, for the avoidance of doubt, is the amount required to be remitted to the Owner with respect to principal collections on such Remittance Date pursuant to the immediately preceding paragraph), the Servicer shall provide a notice to the Class S Certificateholder indicating the amount of such excess, and (ii) the amount described in clause (y) above exceeds the amount described in clause (x) above, the Servicer shall (1) in accordance with the terms and conditions of Section 4.05(v) above, be entitled to withdraw from the Custodial Account from principal collections an amount equal to the amount described in clause (x) above and (2) remit to the Owner the related monthly remittance. The Class S Certificateholder shall, by 5:00 p.m. Eastern Time on such Remittance Date, remit to the Servicer by wire transfer the amount of any such excess as described in clause (i) hereof.”
(m) Section 5.02 of the Purchase Agreement is hereby amended by deleting the second sentence of the first paragraph of Section 5.02 and replacing it with the following (new text underlined):
“With respect to each month, the corresponding individual loan accounting report shall be received by the Purchaser no later than the fifth Business Day of the following month on a disk or tape or other computer-readable format in such format as may be mutually agreed upon by both Purchaser and Company, and no later than the fifth Business Day of the following month in hard copy, and shall contain the following:”
(n) Section 5.02 of the Purchase Agreement is hereby amended by deleting the period at the end of clause (xix), replacing it with a semicolon, adding “and” after the semicolon and adding the following clause (xx) to the first paragraph:
“(xx) each Revolving Credit Loan that has been charged off, released from the trust estate and transferred to the Class X Certificateholder pursuant to Section 4.03 of this Agreement.”
(o) Section 5.02 of the Purchase Agreement is hereby amended by adding the following sentence at the end of the third to last paragraph in Section 5.02:
“The monthly reports on Exhibit L, Exhibit M and Exhibit S shall be provided in the same timeframe as set forth in the first paragraph of Section 5.02.”
(p) Section 6.01 of the Purchase Agreement is hereby amended by adding the following sentence at the end of Section 6.01:
“Notwithstanding anything to the contrary in this Section 6.01, no assumption will be permitted unless (i) the assumptor meets the same Seller underwriting criteria as those that applied to the prior obligor and (ii) the Servicer delivers to the Master Servicer an Officer’s Certificate stating that such assumptor meets such Seller underwriting criteria.”
(q) Section 6.04 of the Purchase Agreement is deleted in its entirety and replaced with the following:
Section 6.04 Annual Statement as to Compliance; Annual Certification.
(a) The Company will deliver to the Purchaser, the Note Insurer and any Master Servicer, not later than March 1 of each calendar year beginning in 2008, an Officers’ Certificate acceptable to the Purchaser and any Master Servicer (an “Annual Statement of Compliance”) stating, as to each signatory thereof, that (i) a review of the activities of the Company during the preceding calendar year (or applicable portion thereof) and of performance under this Agreement or other applicable servicing agreement has been made under such officers’ supervision and (ii) to the best of such officers’ knowledge, based on such review, the Company has fulfilled all of its obligations under this Agreement or other applicable servicing agreement in all material respects throughout such calendar year (or applicable portion thereof), or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status of cure provisions thereof. Such Annual Statement of Compliance shall contain no restrictions or limitations on its use. Copies of such statement shall be provided by the Company to the Purchaser upon request and by the Purchaser to any Person identified as a prospective purchaser of the Revolving Credit Loans. In the event that the Company has delegated any servicing responsibilities with respect to the Revolving Credit Loans to a Subservicer, the Company shall deliver an Annual Statement of Compliance of the Subservicer as described above as to each Subservicer as and when required with respect to the Company.
(b) With respect to any Revolving Credit Loans that are the subject of a Pass-Through Transfer, by March 1 of each calendar year beginning in 2008, an officer of the Company shall execute and deliver an annual certification (“Annual Certification”) to the Purchaser, the Note Insurer, any Master Servicer and any related Depositor for the benefit of each such entity and such entity’s affiliates and the officers, directors and agents of any such entity and such entity’s affiliates, in the form attached hereto as Exhibit O. In the event that the Company has delegated any servicing responsibilities with respect to the Revolving Credit Loans to a Subservicer, the Company shall deliver an Annual Certification of the Subservicer as described above as to each Subservicer as and when required with respect to the Company. The Company acknowledges that the Purchaser, any Master Servicer and the Depositor may rely on the certification provided by the Company pursuant to this Section in signing an Annual Certification and filing such with the Commission.
(c) If the Company cannot deliver the related Annual Statement of Compliance or Annual Certification by March 1st of such year, the Purchaser, at its sole option, may permit a cure period for the Company to deliver such Annual Statement of Compliance or Annual Certification, but in no event later than March 10th of such year.
Failure of the Company to timely comply with this Section 6.04 shall be deemed an Event of Default, automatically, without notice and without any cure period, unless otherwise agreed to by the Purchaser as set forth in 6.04(c), and the Purchaser or any Master Servicer may, in addition to whatever rights the Purchaser or such Master Servicer may have under Sections 3.03, 8.01 and 11.01 and at law or equity or to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Company under this Agreement and in and to the Revolving Credit Loans and the proceeds thereof without compensating the Company for the same, as provided in Section 9.01; provided, however, that any such termination shall not effect the Company’s rights, or the obligations of any other party hereunder, with respect to any Servicing Fees, Servicing Advances or other amounts owed to the Company for services rendered hereunder prior to such termination. Such termination shall be considered with cause pursuant to Section 10.01 of this Agreement. This paragraph shall supercede any other provision in this Agreement or any other agreement to the contrary.
(r) The last three paragraphs of Section 6.08 of the Purchase Agreement are deleted in their entirety and replaced with the following paragraphs:
Failure of the Company to timely comply with this Section 6.08 shall be deemed an Event of Default, automatically, without notice and without any cure period, unless otherwise agreed to by the Purchaser or such Master Servicer as described herein, and the Purchaser or any Master Servicer may, in addition to whatever rights the Purchaser may have under Sections 3.03, 8.01 and 11.01 and at law or equity or to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Company under this Agreement and in and to the Revolving Credit Loans and the proceeds thereof without compensating the Company for the same, as provided in Section 9.01. Such termination shall be considered with cause pursuant to Section 10.01 of this Agreement. This paragraph shall supercede any other provision in this Agreement or any other agreement to the contrary.
(s) The first paragraph of Section 6.09 of the Purchase Agreement is deleted in its entirety and replaced with the following:
The Purchaser and the Company acknowledge and agree that a purpose of Sections 3.01(r), 5.02, 6.04, 6.08 and 11.01 of this Agreement is to facilitate compliance by the Purchaser and any Depositor with the provisions of Regulation AB and related rules and regulations of the Commission. None of the Purchaser, any Master Servicer or any Depositor shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder. The Company acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with requests made by the Purchaser, any Master Servicer or any Depositor in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB. In connection with any Pass-Through Transfer, the Company shall cooperate fully with the Purchaser and any Master Servicer to deliver to the Purchaser (including any of its assignees or designees), any Master Servicer and any Depositor, any and all statements, reports, certifications, records and any other information necessary in the good faith determination of the Purchaser or any Depositor to permit the Purchaser, such Master Servicer or such Depositor to comply with the provisions of Regulation AB, together with such disclosures relating to the Company, any Subservicer, any Third-Party Originator and the Revolving Credit Loans, or the servicing of the Revolving Credit Loans, reasonably believed by the Purchaser, any Master Servicer or any Depositor to be necessary in order to effect such compliance.
(t) Section 9.01 of the Purchase Agreement is hereby amended by adding the following language to the beginning of paragraph (ii) of Section 9.01:
“other than with respect to Sections 6.04 and 6.05,”
(u) Section 9.02 of the Purchase Agreement is deleted in its entirety and replaced with the following:
Section 9.02 Waiver of Defaults.
The Purchaser may waive only by written notice, and with the consent of the Note Insurer (which consent shall not be unreasonably withheld) any default by the Servicer in the performance of its obligations hereunder and its consequences. Upon any such waiver of a past default, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived in writing.
(v) Subsection 11.01(b)(viii) of the Purchase Agreement is deleted in its entirety and replaced with the following:
(viii) For the purpose of satisfying the reporting obligation under the Exchange Act with respect to any class of asset-backed securities, the Company shall (or shall cause each Subservicer and Third-Party Originator to) (i) provide prompt notice to the Purchaser, any Master Servicer and any Depositor in writing of (A) any litigation or governmental proceedings involving the Company, any Subservicer or any Third-Party Originator that could be material to investors in the securities issued in a Pass-Through Transfer, (B) any affiliations or relationships that develop following the closing date of a Securitization Transaction between the Company, any Subservicer or any Third-Party Originator and any of the parties described in Item 1119 of Regulation AB (and any other parties identified in writing by the requesting party) with respect to such Securitization Transaction, (C) any Event of Default under the terms of this Agreement or any applicable Reconstitution Agreement related thereto, (D) any merger, consolidation or sale of substantially all of the assets of the Company, and (E) the Company’s entry into an agreement with a Subservicer to perform or assist in the performance of any of the Company’s obligations under this Agreement or any applicable Reconstitution Agreement related thereto and (ii) provide to the Purchaser and any Depositor a description of such proceedings, affiliations or relationships;
(w) Subsection 11.01(b)(xi) through to the end of Section 11.01 of the Purchase Agreement is deleted in its entirety and replaced with the following:
(i)(A) any untrue statement of a material fact contained or alleged to be contained in any written information, written report, certification, data, accountants’ letter or other material provided under Sections 6.04 or 6.08 and this Section 11.01 by or on behalf of the Company, or provided under Sections 6.04 or 6.08 and this Section 11.01 by or on behalf of any Subservicer, Subcontractor or Third-Party Originator (collectively, the “Company Information”), or (B) the omission or alleged omission to state in the Company Information a material fact required to be stated in the Company Information or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, by way of clarification, that clause (B) of this paragraph shall be construed solely by reference to the Company Information and not to any other information communicated in connection with a sale or purchase of securities, without regard to whether the Company Information or any portion thereof is presented together with or separately from such other information;
(ii) any breach by the Company of its obligations under Sections 6.04 or 6.08, this Section 11.01 and Section 12.17, including particularly any failure by the Company, any Subservicer, any Subcontractor or any Third-Party Originator to deliver any information, report, certification, accountants’ letter or other material when and as required under Sections 6.04 or 6.08 and this Section 11.01, including any failure by the Company to identify pursuant to Section 12.17 any Subcontractor “participating in the servicing function” within the meaning of Item 1122 of Regulation AB;
(iv) the negligence bad faith or willful misconduct of the Company in connection with its performance under Sections 6.04 or 6.08 and this Section 11.01.
This indemnification shall survive the termination of this Agreement or the termination of any party to this Agreement.
Any failure by the Company, any Subservicer, any Subcontractor or any Third-Party Originator to deliver any information, report, certification or other material when and as required under Section 11.01 shall immediately and automatically, without notice or grace period, constitute an Event of Default with respect to the Company under this Agreement and any applicable servicing agreement, and shall entitle the Purchaser, any Master servicer or any Depositor, as applicable, to terminate the rights and obligations of the Company as servicer under this Agreement and/or any applicable servicing agreement without payment (notwithstanding anything in this Agreement or any applicable servicing agreement to the contrary) of any compensation to the Company (and if the Company is servicing any of the Mortgage Loans in a Pass-Through Transfer, appoint a successor servicer reasonably acceptable to any Master Servicer for such Pass-Through Transfer); provided that to the extent that any provision of this Agreement and/or any applicable servicing agreement expressly provides for the survival of certain rights or obligations following termination of the Company as servicer, such provision shall be given effect.
The Company shall promptly reimburse the Purchaser (or any designee of the Purchaser, such as a master servicer) and any Depositor, as applicable, for all reasonable expenses incurred by the Purchaser (or such designee) or such Depositor, as such are incurred, in connection with the termination of the Company as servicer and the transfer of servicing of the Mortgage Loans to a successor servicer. The provisions of this paragraph shall not limit whatever rights the Purchaser, any Master Servicer or any Depositor may have under other provisions of this Agreement and/or any applicable servicing agreement or otherwise, whether in equity or at law, such as an action for damages, specific performance or injunctive relief.
(x) Section 12.04 of the Purchase Agreement is deleted in its entirety and replaced with the following:
Section 12.04 Governing Law.
This Agreement and the related Term Sheets shall be governed by and construed in accordance with the laws of the State of New York without giving effect to principles of conflicts of laws (other than Section 5-1401 of the New York General Obligations Law) and except to the extent preempted by Federal law and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.
(y) The second sentence in Subsection 12.17(d) of the Purchase Agreement is deleted in its entirety and replaced with the following:
“The Company shall be responsible for obtaining from each Subcontractor and delivering to the Purchaser and any Depositor any Assessment of Compliance and Attestation Report and the other certifications required to be delivered by such Subservicer and such Subcontractor under Section 6.08, in each case as and when required to be delivered.”
(z) Section 12.18 of the Purchase Agreement is deleted in its entirety and replaced with the following:
Section 12.18 Third Party Beneficiary.
For purposes of this Agreement, each of the Master Servicer and the Note Insurer shall be considered a third party beneficiary to this Agreement, entitled to all the rights and benefits hereof as if it were a direct party to this Agreement.
(aa) Exhibit L to the Purchase Agreement is deleted in its entirety and replaced with the following new Exhibit L:
EXHIBIT L
REPORTING DATA FOR MONTHLY REPORT
Field Name	Definition	Comments
Deal Name	Assigned name for a specific deal
Investor	Servicer assigned investor number
Mtg Group	Mortgage group assigned in the Pooling and Servicing Agreement for a specific deal
Current Cat	Servicer assigned category that a loan is in currently
Original Cat	Servicer assigned category that a loan was in when it was first assigned to the deal
Loan No	Servicer assigned loan number
Inv Loan	Investor's loan number	LaSalle's Loan #
Cutoff Dt	Reporting period's cutoff date	mm/dd/yyyy
Due Date	Loan's due date as of the end of the reporting period	mm/dd/yyyy
Gross Int Rate	Gross interest rate (a.k.a. Note rate)
Net Int Rate	Net interest rate - gross interest rate minus service fee rate
Pend Rate	For ARM loans only! This is the pending interest rate at the time of the next rate change
Serv Fee	Service fee rate
MI Rate	Lender paid mortgage insurance rate
Sched PI	The scheduled principal and interest payment for the current reporting period	No commas(,) or dollar signs ($)
Arm Index	For ARM loans only! This is the assigned ARM index for the loan
Pend Index	For ARM loans only! This is the pending index for the loan
Beg Sched Bal	Beginning scheduled principal balance as of the beginning of the reporting period	No commas(,) or dollar signs ($)
Prin Remit	Principal remitted is the amount of principal remitted to the master servicer or trustee	No commas(,) or dollar signs ($)
Total Prin Draw Remit	Principal collected on HELOC loans	No commas(,) or dollar signs ($)
Curt Remit	Curtailment remitted is the amount of principal curtailment remitted to the master servicer or trustee	No commas(,) or dollar signs ($)
Curt Adj Remit	Curtailment adjustment remitted is the amount of principal curtailment adjustment remitted to the master servicer or trustee	No commas(,) or dollar signs ($)
Liq Prin	Liquidation principal is the amount of principal remitted to the master servicer or trustee	No commas(,) or dollar signs ($)
Prin Not Adv	Principal not advanced is the amount of principal collected above the principal advanced on loans that are in a stop advance status or the month these loans become reinstated from a stop advance status	No commas(,) or dollar signs ($)
Sched Gross Int	Scheduled gross interest is the amount of gross interest	No commas(,) or dollar signs ($)
Int Remit	Interest remitted is the amount of the net interest remitted to the master servicer or trustee	No commas(,) or dollar signs ($)
Sched Serv Fee	Scheduled service fee (a.k.a. delinquent service fee)
Aggregate Loan Level Service Fee	Aggregate Service Fee Rate * Beginning Scheduled Principal Balance on deals where the service fee rate is at deal not loan level
S&S Diff	Soldier and Sailor difference is the difference in the interest remitted at the old interest rate and the interest at the new interest rate
Net Int Not Adv	Net interest not advanced is the amount of net interest collected above the net interest advanced on loans that are in a stop advance status or the month these loans become reinstated from a stop advance status	No commas(,) or dollar signs ($)
Prepay Penalty	Prepayment penalty is the amount of prepayment penalties remitted to the master servicer or trustee, if applicable per the Pooling and Servicing Agreement	No commas(,) or dollar signs ($)
MI Premium	Lender paid mortgage insurance monthly premium amount
Additional Fee	A fee assessed on delinquent loans on deals where this is applicable
End Sched Bal	Ending scheduled principal balance as of the end of the reporting period	No commas(,) or dollar signs ($)
Beg Arrearage Balance	Total Beginning Arrearage Balance as of the beginning of the reporting period
Arrearage Collected	Total Arrearage Collected
End Arrearage Balance	Total Ending Arrearage Balance as of the end of the reporting period
Remit Amt	The total remitted amount sent to the master servicer or trustee
Beg Actual Bal	Beginning actual principal balance as of the beginning of the reporting period
Prin Coll	Principal collected is the amount of principal collections received by the servicer
Curt Coll	Curtailment collected is the amount of curtailment collections received by the servicer
Curt Adj Coll	Curtailment adjustment collected is the amount of curtailment adjustment collections received by the servicer
Gross Int Coll	Gross interest collected is the amount of gross interest collections received by the servicer
Net Int Coll	Net interest collected is the amount of gross interest collections minus service fee collections received by the servicer
Serv Fee Coll	Service fee collections is the amount of service fee collections received by the servicer
End Actual Bal	Ending actual principal balance as of the end of the reporting period
Liq Date	Liquidation date is the date the loan liquidated on the servicer's system
Liq Type	Liquidation type indicates the type of liquidation (P = paid in full, S = short pay, R = REO sale, T = third party sale, C = charge off, W = write off, N = repurchase, O = note sales, M = loans that have amortized out on the scheduled side)
Gross Prcd	Gross proceeds received on a liquidated loan
Expense	Expenses is the total amount of expenses on a liquidated loan
PI Adv Bal	Principal and interest advance balance on a liquidated loan
Delq Serv Fee	Delinquent service fee on a liquidated loan, if applicable to the deal
Trust Loss	Trustee loss on a liquidated loan
Net Int Funded T62F	Net interest funded
Unremit Coll Int	Unremitted collected interest
End Adv Bal	Ending advance balance
S&S Flag	Soldier and Sailor flag indicates whether a loan is under this classification
S&S Old Rate	Soldier and Sailor old interest rate is the rate prior to the relief act
S&S Old P&I	Soldier and Sailor old principal and interest payment prior to the relief act
Modified Date	Modification date indicates a loan that has been modified. It will continue to hold the current modification date with each cycle.
Stop Adv Flag	Stop advance flag indicates whether a loan is in a stop advance status
Stop Adv Date	Stop advance date indicates the date when the loan went into a stop advance status
BPO Val	BPO value is the market value of the property
Man Code	Servicer's assigned man code
Delq Status Code	Delinquency status code is the status assigned and corresponds to the delinquency summary report
Cash Flow Group	Cash flow group is the group assigned and corresponds to the cash flow report
MSP Prin Bal	Fidelity's ending actual balance as of the end of the reporting period
Amt Forgiven	Amount Forgiven on a modified loan
Delq Actual Balance	The actual principal balance used for the delinquency summary reporting
Delq Sched Balance	The scheduled principal balance used for the delinquency summary reporting
Manual Act Prin Bal Adj	Non-cash adjustments needed to report the correct actual balance on Scheduled/Scheduled loans
Amort Type
Maturity Date
Lien Position
Extended Date Granted
MREC Bal
Advance Escrow Balance
Third Party Balance
Deferred Amount
Pre-funded Date
Repurchase Reason
(bb) Exhibit M to the Purchase Agreement is modified as follows:
All references to “Wells Fargo Bank” shall be replaced with “LaSalle Bank National Association.”
(cc) Exhibit R to the Purchase Agreement is deleted in its entirety and replaced with the following new Exhibit R:
EXHIBIT R
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
AND RELATED ACCOUNTANT’S ATTESTATION
*Servicing* *Criteria*		*Applicable Servicing Criteria*
Reference	Criteria
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	X
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.	X
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the Revolving Credit Loans are maintained.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.	X
	Cash Collection and Administration	X
1122(d)(2)(i)	Payments on Revolving Credit Loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.	X
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	X
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.	X
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	X
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	X
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.	X
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.	X
	Investor Remittances and Reporting	X
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of Revolving Credit Loans serviced by the Servicer.	X (With respect to A, B and D only)
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	X
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.	X
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	X
	Pool Asset Administration	X
1122(d)(4)(i)	Collateral or security on Revolving Credit Loans is maintained as required by the transaction agreements or related Revolving Credit Loan documents.	X
1122(d)(4)(ii)	Revolving Credit Loan and related documents are safeguarded as required by the transaction agreements	X
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	X
1122(d)(4)(iv)	Payments on Revolving Credit Loans, including any payoffs, made in accordance with the related Revolving Credit Loan documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related Revolving Credit Loan documents.	X
1122(d)(4)(v)	The Servicer’s records regarding the Revolving Credit Loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	X
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor's Revolving Credit Loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.	X
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	X
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a Revolving Credit Loan is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent Revolving Credit Loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	X
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for Revolving Credit Loans with variable rates are computed based on the related Revolving Credit Loan documents.	X
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s Revolving Credit Loan documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable Revolving Credit Loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related Revolving Credit Loans, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.	X
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.	X
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.
* The term “investor” under this Exhibit R shall mean “master servicer.”
(dd) Exhibit S to the Purchase Agreement is modified as follows:
All references to “WFB” and “Wells Fargo Bank, N.A.” shall be replaced with “LaSalle Bank National Association.”
Miscellaneous
2. All demands, notices and communications related to the Assigned Loans, the Purchase Agreement and this AAR Agreement shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by registered mail, postage prepaid, as follows:
(a)	In the case of Company:
GreenPoint Mortgage Funding, Inc.
100 Wood Hollow Drive
Novato, California 94945
Attention: Susan Davia
(b)	In the case of Assignor:
EMC Mortgage Corporation
2780 Lake Vista Drive
Attention: Conduit Seller Approval Dept.
Facsimile: (214) 626-3751